Reported pension expense vs Total pension expense

CFA Level II FRA
#1

while doing a EOC in schweser I saw these two terms:

Reported pension expense = Current service cost + Interest cost - expected return on plan assets

Total pension expense = Current service cost + Interest cost - actual return on plan assets

Are these simple US GAAP and IFRS definitions?? I dont get it.

#2

Rasec,

there are two components of the pension cost:

OCI and a PNL element.

reported pension expense --> is the one that appears on PNL. I see you’ve included expected return on plan assets, so it must be a GAAP company.

Total pension expense: OCI + PNL.

looking at schweser… the first question is asking for reported pension expense:

so we know that GAAP requires:

a) interest expense as measured by the discount rate x beginning liabilitity LESS expected return on beginning assets

b) current costs only.

So, we end up with 63 (current service cost) + 29 (interest) less 32.

Are they simple GAAP/IFRS definitions? not sure. But I know that depending on GAAP or IFRS, the number associated with these 2 terms (whatever you wanna call them) will change.

can you help me out with another question?

#3

Thanks! how can i help u?

#4

its okay - i figured it all out.