ninja1024

Trust me it is correct, If you treat a Asset and Liability as a minus. If you subtract at liability (minus) you actually add it, not subtract. I know it seems weird, but the point is you need to add loses and liabilites and subtract gains and liabilites.

here's the math using your formula:

Funded Status (FV plan assets- PBO) = 5798 - 5485 = 313

+/- Unrecognized deferred (gains) and losses – 59
+ unrecognized past service cost + 70
+/- unrecognized transition (assets) or liabilites – 50
= Net Pension asset(liabilites) reported on balance sheet = 274

That's just not right; you're supposed to get a net pension asset of 492, not 274


Here's the correct math. 5798-5485=313 add back 59 (unrec. actuarial losses),add back 50 (unrec. transition liability), and 70 (unrecognized past service cost)= 492

CP was trying to explain the same thing above....

Re: Defined Benefit Liability formula
Posted by: cpk123 (IP Logged)
Date: January 3, 2011 06:54AM


if you started with a sign on the DBO - it is a liability - so it has to be negative...

so -500 -725 = -1225 (a bigger liability).

CP

I guess I didn't do a good job of explaining it before. The point being as long as you add back loses and subtract gains you'll get the right answer.