Reference no: EM131705321

Question: On January 1, Year 1, the Hoverman Corporation made amendments to its defined benefit pension plan, resulting in $150,000 of past service costs. The plan has 100 active employees, of which 60 are vested and the remaining 40 will be vested in three years. There currently are no retirees under the plan. Hoverman has determined the following information regarding the past service costs:

Unrecognized past service costs applicable to:

      Vested employees. . . . . . . . . . . . . . . . . .     $ 90,000

      Unvested employees. . . . . . . . . . . . . . . .         60,000

Total unrecognized past service costs. . . . . . .      $150,000

The aggregate number of future service years of employees expected to receive benefits is 500 years.

Required: Determine the amount of past service costs to be amortized in Year 1 and subsequent years under

(a) IFRS and

(b) U.S. GAAP.