Great Cosmetics Corp., a company reporting under IFRS, has a defined benefit pension plan. Pension information concerning the 2019 and 2020 fiscal years is presented below (in millions):Information provided by the pension plan actuary Defined benefit obligation (DBO), December 31, 2019$2,000Past service cost (PSC) from a plan amendment made January 2, 2020400Current service cost (CSC) for 20205202020 interest cost on DBO, based on 10% discount rate1802020 actuarial gain on DBO arising from a change in estimate250Benefits paid0Funding for the year0Information provided by the pension plan trustee Fair value of plan assets, January 1, 2020$1,800Actual return on plan assets180What is the net defined benefit liability/asset balance on the balance sheet at January 1, 2020? Question 14 options: a) $2,000 net defined benefit liability. b) $3,800 net defined benefit asset. c) $200 net defined benefit asset. d) $200 net defined benefit liability.

In order to determine the net defined benefit liability/asset balance the Fair value of plan assets…

Answered: Great Cosmetics Corp., a company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Great Cosmetics Corp., a company reporting under IFRS, has a defined benefit pension plan. Pension information concerning the 2019 and 2020 fiscal years is presented below (in millions):

Information provided by the pension plan actuary

Defined benefit obligation (DBO), December 31, 2019	$2,000
Past service cost (PSC) from a plan amendment made January 2, 2020	400
Current service cost (CSC) for 2020	520
2020 interest cost on DBO, based on 10% discount rate	180
2020 actuarial gain on DBO arising from a change in estimate	250
Benefits paid	0
Funding for the year	0

Information provided by the pension plan trustee

Fair value of plan assets, January 1, 2020	$1,800
Actual return on plan assets	180

What is the net defined benefit liability/asset balance on the balance sheet at January 1, 2020?

Question 14 options:

a)	$2,000 net defined benefit liability.

b)	$3,800 net defined benefit asset.

c)	$200 net defined benefit asset.

d)	$200 net defined benefit liability.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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