President1988

Thanks, I think I follow you guys and I don't have a disagreement with the above. Dreary, I follow your sign terminology too. We are saying the same thing, I assumed liability as positive number and subtracted the gains (again a positive number) - ie. you end up with lower liability.


However, my question is something totally different.

a) What is an unrecognized past service cost? - Book says that its a cost that should have occurred in the past, but we didn't recognize it so lets do it now. So effectively unrecognized past service cost is now added to your total PBO.
b) What is unrecognized actuarial losses? books says that due to change in some of actuarial assumptions we've increased our PBO liability.



Now go to pg #200. You'll notice that in solution to 1st problem, they've taken PBO = 5485
and instead of increasing the PBO liability by unrecognized actuarial losses & past service costs, they've reduced PBO by that much. <--------- THIS IS THE PART I NEED HELP WITH UNDERSTANDING.