I am having issues understanding pension expense. I realize there are several ways to compute this but i am specifically interested in understanding the method the curriculum uses (company contributions - change in funded status)
So example 7 pg 220 - there is an increase in funded status of 21,168 - (underfunded ie liability) the book simply then subtracts (4436 - 21168) to compute the economic expense.
Example 8 - similar case, also a net funded liability, but this time the company contributions are added to arrive at economic expense (200 + 2808) !?!?!?!
I could be missing something here, can someone please clarify. All i know is that had it NOT been for the company contribution the liability would have been much higher.
Also on the exam, do they specify a liability or are we to assume that a positive number is a liability?
Thanks