Lewis, a public limited company, has a defined benefit plan for its employees. The present value of the future benefit obligations at 1 January 20X7 was $1,120 million and the fair value of the plan assets was $1,040 million. Further data concerning the year ended 31 December 20X7 is as follows: $m 76 Current service cost Benefits paid to former employees Contributions paid to plan 88 94 Present value of benefit obligations at 31 December Fair value of plan assets at 31 December 1,222 1,132 As valued by professional actuaries Interest cost (gross yield on 'blue chip' corporate bonds): 5% On 1 January 20X7 the plan was amended to provide additional benefits with effect from that date. The present value of the additional benefits at 1 January 20X7 was calculated by actuaries at $40 million. Required Prepare the required notes to the statement of profit or loss and other comprehensive income and statement of financial position for the year ended 31 December 20X7. Assume the contributions and benefits were paid on 31 December 20X7.

Lewis, a public limited company, has a defined benefit plan for its employees. The present value of the future benefit obligations at 1 January 20X7 was $1,120 million and the fair value of the plan assets was $1,040 million. Further data concerning the year ended 31 December 20X7 is as follows: $m 76 Current service cost Benefits paid to former employees Contributions paid to plan 88 94 Present value of benefit obligations at 31 December Fair value of plan assets at 31 December 1,222 1,132 As valued by professional actuaries Interest cost (gross yield on 'blue chip' corporate bonds): 5% On 1 January 20X7 the plan was amended to provide additional benefits with effect from that date. The present value of the additional benefits at 1 January 20X7 was calculated by actuaries at $40 million. Required Prepare the required notes to the statement of profit or loss and other comprehensive income and statement of financial position for the year ended 31 December 20X7. Assume the contributions and benefits were paid on 31 December 20X7.

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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Employee benefits