Can somebody please tell me the different usages of discount rate in Pension accounting under IFRS and GAAP.
Do we use different rates for assets and liabilities or the same discount rate?
Thanks a lot!
Assets aren’t discounted; only liabilities.
You’re welcome.
discount rates refer to the projections of the present value of future retirement payments earned every year ei service costs.
i believe you are refering to interest rates and expected return… IFRS explicitly states that interest cost on obligations = expected return on assets… thus on income statement you can get net of interest expense directly. GAAP allows differences… so on the income statement you will see both interest and expected returns separately in the calculations