FlagStaff Ltd has a defined benefit pension plan for its employees. The company is considering introducing a defined benefit contribution plan, which will be available to all incoming staff. Although the defined benefit plan is now closed to new staff, the fund is active for all employees who have tenure with the company. In 2020, the following actuarial report was received for the defined benefit plan: Present value of the defined benefit obligation 31 December 2019 Past Service Cost Net interest Current service cost Benefits paid Actuarial gain/loss on DBO 2020/$ 18 000 000 4 000 000 ? 600 000 2 000 000 ? Present value of the defined benefit obligation 31 December 2020 21 000 000 Fair value of plan assets at 31 December 2019 Return on plan assets Contributions paid to the plan during the year Benefits paid by the plan during the year Fair value of plan assets at 31 December 2020 17 000 000 ? 1500 000 2 000 000 27 500 000

FlagStaff Ltd has a defined benefit pension plan for its employees. The company is considering introducing a defined benefit contribution plan, which will be available to all incoming staff. Although the defined benefit plan is now closed to new staff, the fund is active for all employees who have tenure with the company. In 2020, the following actuarial report was received for the defined benefit plan: Present value of the defined benefit obligation 31 December 2019 Past Service Cost Net interest Current service cost Benefits paid Actuarial gain/loss on DBO 2020/$ 18 000 000 4 000 000 ? 600 000 2 000 000 ? Present value of the defined benefit obligation 31 December 2020 21 000 000 Fair value of plan assets at 31 December 2019 Return on plan assets Contributions paid to the plan during the year Benefits paid by the plan during the year Fair value of plan assets at 31 December 2020 17 000 000 ? 1500 000 2 000 000 27 500 000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 4E

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Some years ago, Junior Ltd established a defined benefit pension plan for its employees. The company has since introduced a defined contribution plan, which all new staff join when commencing employment with Junior Ltd. Although the defined benefit plan is now closed to new recruits, the fund continues to provide for employees who have been with the company for a long time. The following actuarial report has been received for the defined benefit plan: 2018/$ Present value of the defined benefit obligation 31 December 2017 20,000,000 Past service cost 2,000,000 Net interest ? Current service cost 800,000 Benefits paid 2,100,000 Actuarial loss on DBO 100,000 Present value of the defined benefit obligation 31 December 2018 23,000,000 Fair value of plan assets at 31 December 2017 19,000,000 Return on plan assets ? Contributions paid to the plan during the year 1,000,000 Benefits paid by the plan during the year Fair value of plan assets at 31 December 2018…
Some years ago, Junior Ltd established a defined benefit pension plan for its employees. The company has since introduced a defined contribution plan, which all new staff join when commencing employment with Junior Ltd. Although the defined benefit plan is now closed to new recruits, the fund continues to provide for employees who have been with the company for a long time. The following actuarial report has been received for the defined benefit plan: 2018 ($) Present value of the defined benefit obligation 31 December 2017 20,000,000 Past service cost 2,000,000 net interest a current service cost 800,000 benefits paid 2,100,000 actuarial loss on DBO 100,000 Present value of the defined benefit obligation 31 December 2018 23,000,000 Fair value of plan assets at 31 December 2017 19,000,000 Return on plan assets b Contributions paid to the plan during the year 1,000,000 Benefits paid by the plan during the year 2,100,000 Fair value of plan assets at 31…
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