sabre

gan1984 Wrote:
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There are two ways two calculate Economic Pension
Expense:

1. Economic Pension expense = service cost +
interest cost - actual return.

2. Change in Funded Status - Employer
contribution.


As for when to use actual return and expected
return, I think you always have to use expected
return to calculate Pension Expense on Income
Statement else the expense would be too volatile.
In contrast, you have to use actual return to
calculate PBA. Could anyone confirm this?
So how do you know which formula to apply? I am sure there will be both answers amongst the choice?