Page 481 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Answers

Exxampple 2

T has a defineed benefit pension pllan and maakes up finnancial stattements too 31
March each yyear. The nnet pensionn liability (i.e. obligation less plaan assets) at
31 March 20XX3, was $440 million ($$35 millionn at 31 Marrch 20X2). The followwing
addditional infoormation iss relevant ffor the year ended 311 March 200X3:

 The disccount rate relevant too the net liaability at the start of tthe year waas
10%.
 The currrent service cost wass $45 millioon.

 At the ennd of the yyear the enntity granted additionaal benefits to existingg
pensioneers that haave a preseent value oof $10 million. These were not
allowed for in the ooriginal acttuarial assumptions.

 The entity paid pennsion contributions oof $40 millioon.
Reqquired:
Callculate thee re-measurement ccomponennt gains/loosses arising in the
yeaar ended 331 March 220X3.

Preepare extraacts from the statemment of prrofit or losss and othher
commprehensive incomme for the yyear endeed 31 Marcch 20X3 annd the
statement off financial position aat 31 Marcch 20X3 shhowing hoow the
deffined beneefit schemme would bbe presentted.

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