Reading 20 - Pensions EOC Q10 & Q11 only, online, expected, resources

SWASH

Anyone looked at Q10 & 11 from the EOC of CFAI books?
According to Scwesser pg 108 (and most other online resources I have researched):
“The Return on Plan Assets has no effect on the PBO. However, the expected return on the assets reduces pensions expense” - in other words, we reduce pension expense in the I/S by the amount of the expected return on the plan assets for IFRS and GAAP.
However, in the CFAI book pg 179 we are told that it is only under GAAP that the expected return on plan assets reduce the pension expense.
Can anyone please clear this up for me? I would, of course assume, thtat the CFAI way is correct but it seems at odds with all other resources which is causing me a bit of confusion.
Thanks

Chuckrox

It isn’t very difficult once you get your head around it, the problem is getting your head around it. Its a difficult topic. Some one please correct me if I’m wrong.
The chart you posted  doesn’t paint the whole picture. First thing, GAAP will have two rates, the discount rate and the expected return of plan assets, while IFRS will only use the discount rate.
GAAP Expense
Service Cost +
Interest Cost = (Beg PBO * Discount rate) - (Beg FV Plan Assets * Expected return rate)+
Past Service Cost ( Goes to OCI then is amortized over employees expected service life into IS)+
Actuarial Gains/Loses (Amortized from OCI using Corridor Approach)
= Income statement pension Expense
For IFRS
Service Cost+
Net Interest Cost (BEG Fund status * Discount Rate) See its just PBO * discount rate - plan assets* discount rate, this cost could be a  revenue too if you have  FV plan AssetsPBO    +
Prior Service Cost ( realized all at once in I/S)+
= Income Statement Pension expense (actural gains and loses go to OCI and are not amortized)
Boom! Pension expense…