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Question
The service cost was $950,000 during 2011 and $1,045,000 during 2012.The prior service cost amortization each year was $290,000.
The contribution to the pension plan was $1,500,000 on December 31, 2011 and $1,800,000 on December 31, 2012.
The actuarially determined discount rate and the expected return on plan assets was 10%.
The actual return on plan assets was 9.5%.
Retirement benefits pertaining to years of service prior to 2011 were granted to the employees. The prior service cost is being amortized over the remaining ten-year life of the employees.
Differences between IFRS and U.S. GAAP in accounting for pensions include:
A. Under U. S. GAAP the balance sheet asset (liability) on the balance sheet differs from the plan's actual funded status, while under IFRS the balance sheet asset (liability) on the balance sheet equals the plan's actual funded status.
B. Under IFRS unamortized past service costs are off-balance-sheet.
C. Under U. S. GAAP there are two methods for recognizing actuarial gains and losses.
D. U. S. GAAP requires that new prior service cost would be recognized immediately as part of service cost, while IFRS accounts for these costs off-balance-sheet.
Answer
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