economic expense: schweser practive vol1, exam2, q95 afternoon, economic, practice, include

Ionutzakis

schweser practice vol1, exam 2 afternoon session , q95i
is the formula for IFRS? if under GAAP, when calculate economic expense, do we also include actuarial gain/loss? thanks

economicz

deep2002 Wrote:
——————————————————-
You don’t add actuarial G/L, economic expense is
just:
Interest cost + Service cost - Actual Return on
Plan assets

Ref: 2008 secret sauce
No, you do add the actuarial gain/loss to arrive at economic pension expense (see the schweser exam 2pm question)

anshultongia

End - Begin - Employer Contributions= Economic Pension Expense will give you a negative number, but it’s the same formula that cpk gave; he did the reverse:
Begin - End + Employer Contributions

Kapie

your right,
You should add/subtract current period actuarial losses (gain) in my formula.
CP:
I have Change in funded status (End - Begin) - contributions

lunarfollies

deep2002 is incorrect page 104 of CFAI book.
cpk123 in the second formula you need to subtract contributions not to add them.

bleach

These formulae are better:
1. Change in PBO + Benefits Paid - Actual Return in Plan Assets
2. Change in Funded Status (Begin - End) + Employer Contributions

bkballa

You don’t add actuarial G/L, economic expense is just:
Interest cost + Service cost - Actual Return on Plan assets
Ref: 2008 secret sauce

Iginla2010

economic expense has nothing to do with accoutning rules so it doesn’t matter if it’s IFRS or GAAP.
I think you add actuarial gain/loss just like plan amendments