Employee Compensation

Question 1

Periodic pension cost in P&L (US GAAP)

Answer 1

=Current service cost + interest cost* - expected return on assets

*interest cost = PBO at the beginning of the period * discount rate

Question 2

Benefits paid calculation

Answer 2

Beginning obligation + current & past service costs + interest expense+ increase in obligation due to actuarial loss - ending obligation = benefits paid

Beginning plan assets + contributions + actual return on plan assets - ending plan assets = benefits paid

Question 3

Total periodic pension cost

Answer 3

Change in net pension liability + employer’s contribution into the plan

Question 4

Periodic pension cost in P&L (IFRS)

Answer 4

Service cost (past & current) + net interest expense(income)*

• = beginning net pension asset/liability * discount rate used to measure pension liability