CHP 19 - Pensions & Other employees future benefits

Question 1

CHP 19 - Pensions & Benefits

• Paper notes for the table
• overfunded vs underfunded plan

Answer 1

1) underfunded plan = sponsor of the plan bears this rik = obligation > the plan assets pension liability on company’s books
2) overfunded plan = obligation < the plan assets = pension asset on company’s books
3) we use the word “obligation” when referring to the plan
4) we use the word “liability” when referring to the company
5) valuation allow end = pension asset/liab end
6) defined benefit oblig plan= (plan assets from plan’s books) - (pension asset or liability from company’s books)
7) Expected return (expected return + remeasure gain or loss)

open balance = plan assets begin * 12/12
+contributions july * 6/12
+contributions october *3/12
- benefits paid * 6/12
= total amount
1) total amount * int rate = expected return in table (always -table)
2) total amount * actual rate = actual return
3) Actual return - expected return = remeasurent gain or loss (if gain -table, if loss +table)

8) Interest on obligation

open balance = benefit obligation* 12/12 
\+ benefits paid*6/12 
\+ past service cost *0/12
- current service cost *6/12
= total amount 
1) total amount*int rate (+table)

Question 2

Journal entries (ASPE vs IFRS)

Answer 2

ASPE

Dr Pension Exp(end pens exp)
Cr Cash (end cash)
Cr Pension liability (plug)

IFRS

Dr Pension exp
Cr OCI
Cr Cash
Cr Pension liab

Dr Pension exp (end pens exp)
Dr Pension liab (end pens liab) 
Dr Pension asset (end pens asset)
Dr OCI (plug) 
Cr Valuation allowance (end pens asset) 
Cr Cash (end cash)