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Question about employee benefit

Forums › ACCA Forums › ACCA SBR Strategic Business Reporting Forums › Question about employee benefit

  • This topic has 2 replies, 2 voices, and was last updated 10 years ago by Ruby.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • May 4, 2015 at 5:06 pm #244041
    Tianxiao
    Member
    • Topics: 12
    • Replies: 6
    • ☆

    Hi,

    ” After conculting with the actuaries, the company decide to reduce its contributions for the year to $45 million.”

    Why this statement would result to an increase of current liability by $45 million ? I thought contribution received only causes an increases in plan assets.

    May 5, 2015 at 3:54 am #244096
    Tianxiao
    Member
    • Topics: 12
    • Replies: 6
    • ☆

    Anyone?

    May 5, 2015 at 5:38 pm #244212
    Ruby
    Member
    • Topics: 4
    • Replies: 46
    • ☆☆

    Liability on defined benefit plan =
    opening net assets/deficit
    + finance cost
    + Current year service cost
    + past service cost
    – Contribution paid to scheme.

    Therefore, if you reduce the contribution paid, your liability will increase.

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