[Tux]

Is there an error in the Wiley solution to the SIM in pensions?

In the listed information, it says that beginning PBO is $224,000

But, in the spreadsheet, it has a beginning PBO of $250,000.

Are these numbers supposed to be different?

If so, please help me understand why.

Or, is this an error in the problem?

thanks!!

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Anonymous]

Yes I saw that too

[Anonymous]

Yes I saw that too

[Tux]

Regarding the same problem – I'm confused about how they treated the reconciliation of the funded status (column Pension asset/liability).

I'm trying to follow the formula given by Becker for the reconciliation of funded status and the result does not match the solution in this problem. Wondering why?

Per Becker, to reconcile funded status:

Beginning funded status

+ contributions

– Service cost

– interest cost

+ return on plan assets

– amortization of PSC

– gain amortization/ + loss amortization

Thanks for anyone's help!

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Tux]

Regarding the same problem – I'm confused about how they treated the reconciliation of the funded status (column Pension asset/liability).

I'm trying to follow the formula given by Becker for the reconciliation of funded status and the result does not match the solution in this problem. Wondering why?

Per Becker, to reconcile funded status:

Beginning funded status

+ contributions

– Service cost

– interest cost

+ return on plan assets

– amortization of PSC

– gain amortization/ + loss amortization

Thanks for anyone's help!

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Tux]

UPDATE:

OK. I see that for my second question above, it is not correct to include the amortizations of PSC and gains/losses in the funded status reconciliation.

Instead, include only an increase in PSC from the current period and current gains/losses from the current period are included. In this example, both of those would be zero.

Regarding my first question above –

I will assume the discrepancy is an error by Wiley.

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Tux]

UPDATE:

OK. I see that for my second question above, it is not correct to include the amortizations of PSC and gains/losses in the funded status reconciliation.

Instead, include only an increase in PSC from the current period and current gains/losses from the current period are included. In this example, both of those would be zero.

Regarding my first question above –

I will assume the discrepancy is an error by Wiley.

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[Author]

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