标题: Funded status is underfunded [打印本页] 作者: parott 时间: 2011-7-13 13:07 标题: Funded status is underfunded
If the funded status is $85M underfunded, and the unrecognized actuarial gain is $12M and unrecognized prior service cost is $27M, what is the amount of the net pension liabilities reported according to IFRS, $70M or $100M?作者: bdavi77962 时间: 2011-7-13 13:07
85 + 12 -27 = 100 M作者: xilige 时间: 2011-7-13 13:07
Kaplan answer is 70M....作者: profil 时间: 2011-7-13 13:07
think of it this way. Pension assets of 100 and PBO under GAAP of 185 (hence the 85 underfunded.) 12 actuarial gain needs to be added back to the 185 and the 27 needs to be subtracted. Under GAAP, the gain lowered the PBO and the prior service cost would increase it. Since under IFRS, the adj PBO would be 170 and the asset cost would be 100, so the funded status would change to 70 underfunded.
Edited 1 time(s). Last edit at Monday, May 23, 2011 at 11:13PM by piwanowi.作者: ninja1024 时间: 2011-7-13 13:07
The correct answer is 85-12+27 = 100
IFRS balance sheet liability = the net underfunded amount + deferred expenses - deferred gains. GAAP balance sheet liability = net underfunded amount. The deferrals go to OCI.
Where in Kaplan are you seeing 70?
francis Wrote:
-------------------------------------------------------
> If the funded status is $85M underfunded, and the
> unrecognized actuarial gain is $12M and
> unrecognized prior service cost is $27M, what is
> the amount of the net pension liabilities reported
> according to IFRS, $70M or $100M?
- Robert作者: hassan 时间: 2011-7-13 13:07
Pinowa, from reading the notes, my understanding is that the only difference between IFRS and US GAAP is reflected in the funded status. Are you saying the PBO and Asset plan also differ under?作者: RepoToronto 时间: 2011-7-13 13:07
It should be 70.
IFRS is a smoothed number, so remember under IFRS, it will be a smaller number compared to the number under US GAAP, which is the net funded status. Hence, more volatile reporting under US GAAP because small movements in the components of Plan Assets or PBO cause big movements in the funded status.
So intuitively, if the plan is overfunded (assets>PBO), it will be a smaller (+) number
if the plan is underfunded (PBO<assets), it will be a smaller (-) number
Now, back to the equations and formulas -
if it's a cost: add back
if it's a gain: subtract
to get a smooth number for IFRS
Hope this helps作者: Rasec 时间: 2011-7-13 13:07
Iginla2010 Wrote:
-------------------------------------------------------
> It should be 70.
>
> IFRS is a smoothed number, so remember under IFRS,
> it will be a smaller number compared to the number
> under US GAAP, which is the net funded status.
> Hence, more volatile reporting under US GAAP
> because small movements in the components of Plan
> Assets or PBO cause big movements in the funded
> status.
>
> So intuitively, if the plan is overfunded
> (assets>PBO), it will be a smaller (+) number
> if the plan is underfunded (PBO<assets), it will
> be a smaller (-) number
>
> Now, back to the equations and formulas -
> if it's a cost: add back
> if it's a gain: subtract
> to get a smooth number for IFRS
>
> Hope this helps
It should be 100, not 70.
85 - 12 + 27 = 100
You cannot make any assumption about the size of the amount. It depends on unrecognized G/L, not 'smoothing effect'.
Edited 1 time(s). Last edit at Tuesday, May 24, 2011 at 05:51AM by zestzorb.作者: xilinx_altera 时间: 2011-7-13 13:07
It should be 70.
Underfunded = Negative = PBO > PA
Unrecognized Cost = Positive
Unrecognized gain = Negative.
It's a note I took and it applies all the time.作者: MiniMe7 时间: 2011-7-13 13:07
The correct answer is 70. My previous answer of 100 was incorrect.
I see now we're all ready for a massive pension problem on the exam!
