Reference no: EM132891417
Problem - Net Gain or Loss Hudson Company's actuary has provided the following information concerning the company's defined benefit pension plan at the end of 2019:
Fair value of plan assets (1/1/2019) $ 350,000
Actual projected benefit obligation (1/1/2019) 360,000
Expected projected benefit obligation (1/1/2019) 424,000
Average remaining service life of employees 10 years
The difference between the actual and expected projected benefit obligation first occurred in 2018.
Required -
1. Compute the amount of the gain or loss for Hudson's pension plan at the beginning of 2019, assuming that Hudson uses the corridor approach.
2. Compute the amount of the net gain or loss to include in Hudson's pension expense for 2019. Indicate whether it is an addition to or a subtraction from pension expense.
3. If Hudson Company is using IFRS, how would the gain or loss be treated?