CFAi defines Funded status as Pv of DB obligation - fair value of plan assets
Schweser defines it as : Funded status = Fair value of plan assets - PBO
WHYYYYYYYYYYYYYYY?
thanks 
If that is the case, then Schweser is wrong. The funded status is a net liability account…
Funded Status is NOT AN ACCOUNT - it is just a Status.
It is just a status number. There are two ways to represent the same.
- PV(Assets) - PBO – If this number is positive (Greater than or equal to 0) -> the Pension plan Funded Status is “Fully funded”.
If number is negative -> Plan is UNDERFUNDED.
- Another way of representing the same is to look at PV(Assets)/PBO. In this case - a Fully funded plan would have a Funding Status of greater than or equal to 1. If it is less than 1 - Plan is Underfunded.
The number could also be shown as PBO - PV(Assets). which is just -1 * the above.
Brightstar - what you are talking about liability account - if the plan is underfunded - you would see a net pension liability on the balance sheet. If the plan is over funded or fully funded - you would see a net pension asset on the balance sheet.
CPK - is it easier to look at it from the schweser view? or are there situations where looking at the PBO from CFAi is better?
as far as I am concerned - both views are the same - one is just -1 * the other.
you need to adopt one view and be consistent.
for what it’s worth - I did my Level II in 2010 - and at that time the reading was different and an older reading. So you need to look at what CFAI says today, and if there is a mismatch - reach out to Schweser and ask them to tell you what they think.
Ignore Schweser. CFAI formula isn’t hard to understand. Schweser is “negating” the CFAI formula, but it ends up confusing even further. As is, this reading will give you enough heartache elsewhere… no need to get caught up in such minor details!
remember, the peeps writing the cfa syllabus are also the peeps making the exam…better to familiarise youself with cfai version methinks
Thanks Gents!