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FV OF PENSION ASSET=250
FV OF PENSION LIABILITY=200ACTUARIAL LOSSES=22
THAT’S WHY ACTUARIAL VALUE OF PENSION PLAN SHOWS A SURPLUS OF 72.
HOW CAN ACTUARIAL LOSSES CONTRIBUTE TO SURPLUS?
REFERENCE: 2011 Q1.6
Because they are debits – in the same way that assets are debits and FV of Liability is a credit!
However! Actuarial losses are now no longer carried forward in the old-fashioned Unrecognised Gains and Losses Account!
They are now called “Re-measurements” and are expensed or credited to the Statement of Income in the year in which they arise
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