Pension Expense help (FAR)

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  • #1406675
    tmacpa
    Participant

    pension expense mcq

    I know I got this one right, but after looking at my notes, why wouldn’t the 40,000 unexpected loss be included??

    Is it because it is from a subsidiary?

    This is the U in the P-R-I-U-S formula

    AUD - 78
    BEC - 79
    FAR - 78
    REG - 90
    short-term sacrifice = long-term gain
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  • #1421997

    Yes. The subsidiary loss does not factor into pension expense. My Becker review materials has this question in it. Essentially, items that seem as though they might not belong in pension expense should not be factored in. I've never heard of the formula you referenced, since Becker has its own (SIR AGE), but if you come across a problem where information is different from what usually fits in your formula, it is most likely an exam trick. Hope this helps.

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