Petey
Ltd. has a policy of obtaining an actuarial pension valuation every three
years. Based on the individual components of its annual pension expense, Petey
Ltd.’s accrued benefit obligation as at December 31, 2011, was $356,700.
An
actuarial valuation revealed that the accrued benefit obligation is actually
$388,000. The difference is mostly the result of revised estimates given the
recent stock market troubles. Discuss the options available under IFRS to
account for the actuarial loss.
Based on the actuarial report, there is a $31,300
actuarial loss. There are two options
available under IFRS to account for this loss:
·
The
$31,300 can remain unrecognized until the total unrecognized gain/(loss)
exceeds the corridor amount (i.e., defer and amortize)
·
The
entire $31,300 can be recognized immediately in other comprehensive income,
rather than net income.
