Ch. 21 - Employee Benefits

Question 1

Defined Contribution Plan - Expenses include:

Answer 1

1. current service cost
2. past service granted in the period
3. net interest cost

Question 2

Actuarial Risk:

Answer 2

the risk that employees live longer and require more retirement money

Question 3

The defined benefit obligation is:

Answer 3

The PV of all future employee benefits estimated to be paid

Question 4

Plan Assets and Defined Benefit Obligation: Impact on FS

Answer 4

not included in FS

Question 5

Interest cost is calculated as:

Answer 5

the weighted average DBO for the period x discount rate

Question 6

Interest income is calculated as:

Answer 6

the weighted average plan assets for the period x discount rate

Question 7

To calculate the weighted average DBO:

Answer 7

Opening DBO
+ past service cost
+ current service cost
- weighted benefits paid

Question 8

To calculate the weighted plan assets:

Answer 8

Opening plan assets
+ weighted contributions
- weighted benefits paid

Question 9

Remeasurement gains / losses on DBO - calculated as:

Answer 9

Opening DBO
\+ current service cost
\+ past service cost
\+ interest on DBO
- benefits paid in the year
= expected ending DBO
- Actual ending DBO
= Remeasurement gain/loss

Question 10

Remeasurement gains / losses on assets - calculated as:

Answer 10

Opening plan assets
\+ contributions in the year
\+ interest income on assets
- benefits paid in the year
= Expected ending assets
- Actual ending assets
= Remeasurement gain/loss

Question 11

ASPE - recording actuarial gain/losses

Answer 11

ASPE records gains/losses to net income, while IFRS records to OCI