IAS 19 Flashcards
What is the std and rule when there is a PLAN AMENDMENT?
STD : This will result in Past Service Cost (PSC) which falls withing the scope of ias 19. Std req that PSC must be exp to SOPL.
Rule : ias 19 req that exp to sopl in the year in which it is incurred
What are the 3 factors that will in result Actuaries revising their assumptions (updated)?
1- PV of DBO
2 - FV of PA
3 - asset ceiling test
What is the std for calculating net pension liab/ deficit?
Closing balance of net pension liab/ deficit is calculated at year end by OFFSETTING closing FV of PA to the closing of PV of DBO.
What is the effect to sofp when benefits are paid?
Reduce FV of PA and PV of DBO as benefits are taken out of PA to meet payments to retired ee (oblg)
What is the effect of sofp when contribution is made?
Increase in FV of PA and result in cash outflow to the co.
What is the accounting of CSC?
Exp to SOPL and will rsult in increase in PV of DBO.
What is the std for calculating net interest/ finance cost?
Net FC be calculated using OP rate of interest (disc rate %) and multiply it by OP net liab which will be exp to SOPL amd will result in increase of DBO
Under DCS what is fixed and what varies?
Contribution in is fixed; benefit varies
What can arise to PSC and adjustment shd be made (ias 8)?
Plan amendment (pension benefit inc or dec/ upgrade or degrade scheme);
Curtailment (reduce no of ee);
Intro to DBS for the first time;
Settlement (scrapped scheme /use PA to pay oblg) -> G/L to SOPL
Prospectively; change in AE; acc in CY
Under what pension scheme, where er’ bears the risk?
DBS (Contribution in varies)
In DCS how to calculate amount to be put in?
(Basic salary + bonus) x fixed %
Post employment exp uses what principle?
Matching principle (co receive svcs)
Does DCS needs actuary?
NO
Double entry for DCS
Dr SOPL
Cr Cash/ CL
Under DBS, er holds …… to the ee and meets definition of …… in ias 1
Guarantee;
Liab (creates oblg)
Under DBS, Actuaries estimation is based on what method used?
Projecy unit credit method (Cr NCL)
Formula for calculating DBO under DBS and why does contribution fluctuates?
Epf % x last drawn (meas uncertainty bcs based on actuaries est)
If there is a change in Actuaries’ estimation, how to account for it?
Under ias 8, change in AE; adj prospectively
What is the risk under DBS?
Er must ensure that sufficinent FV of PA to meet PV of DBO (risk borne by er)
What is asset ceiling test?
When cl pv of DBO< cl fv of PA = net surplus;
Actuary advice : where refund or reduction in contribution is made
BCS contribution cannot be exp to SOPL!!! => distortion of profits
What are 3 service cost under DBS that is exp to SOPL?
PSC, CSC & Settlement g/l
Components in Cl PV of DBO
OP PV of DBO + int cost (unwind disc) + CSC + PSC - benefit pd + remeas g/l
What are the components in ariving Cl FV of PA?
OP FV of PA + int inc (invst earnings where est ×= to actual return) + contribution in - benefit pd + remeas g/l
