Page 426 - SBR Integrated Workbook STUDENT S18-J19

Chapter 25

Example 4

Asset ceiling

The scheme was in surplus at the start of the year. This would have been
recognised at the lower of $15 million ($110m – $95m) and $10 million – i.e.
$10 million.

Interest on the asset of $0.6 million ($10m × 6%) will be credited to profit or
loss as income. The service cost of $7 million is charged to profit or loss as an
expense. The contributions increase the scheme surplus.

The scheme was still in surplus at the end of the year. The surplus is
recognised at the lower of $17 million ($124m – $107m) and $10 million – i.e.
$10 million.

The remeasurement loss of $1.6 million will be charged to other
comprehensive income. This includes the impact of applying the asset ceiling.

Reconciliation of net surplus
$m

Balance bfd (10)
Net interest component (0.6)

Service cost component 7.0
Contributions (8.0)

Benefits paid –
Re-measurement component (bal. fig) 1.6

–––––
Balance cfd (10)

–––––

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