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Hello Sir,
Regarding the Layout scenario
there is a sttelment of of $ 60 and in the quesion it says that the value of the contribution has reduced by $ 50m by this settement and consequently a $10m loss has happenedI want some clarifcation of the transsaction .
Is this $ 50m considered to be the payement for the assets and $ 60m is the payment for the liabilities.and the $10 is the difference between them.
Thanks
Settlement of 60 = amount paid to beneficiaries in return for surrender of benefits – this will DECREASE the pension ASSETS
Value of contribution of 50= I’m not sure of your context, but I supect this implies reduction in amount I must pay to beneficiaries – this will decrease pension LIABILITIES
As you say, reduction in assets is greater than reduction in liabilities. Therefore a loss of 10.Hope this helps.
🙂
Hi,
Good .
But I want to know how to differntiate between the pension as an assets and the pention as a credit and are they different from each other.
i.e how to consider the pension as a debit and the other as a credit.Do you mean that the debit is the company which puts in for the pension and the credit is the pension which the company has to pay to benefiary?
Thanks.
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