Discuss the effect of the pension plan on Scott Enterprises

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Question - Scott Enterprises Inc. sponsors a defined benefit plan for its 500 employees. On December 31, 2020, the company's actuary provided the following information related to the plan: defined benefit obligation $11.3 million, and fair value of plan assets $9 million. Annual pension expense was $3 million in 2020. Scott Enterprises' statement of financial position (SFP) as at December 31, 2020, shows total assets of $9 million and total liabilities of $9.8 million (which includes a net defined benefit liability of $2.3 million). There were no actuarial gains or losses or re-measurement gains or losses in 2020. Scott Enterprises follows IFRS.

a. Discuss the effect of the pension plan on Scott Enterprises' SFP as at December 31, 2020.

b. Discuss some of the costs of the pension plan to Scott Enterprises' business.

Reference no: EM133028788

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