Donna, Inc. operates a defined benefit pension scheme for staff. The pension scheme has been operating for a number of years but not following IAS 19. The finance director is unsure of which accounting policy to adopt under IAS 19 because he has heard very conflicting stories. He went to a US GAAP seminar recently that referred to a ‘10% corridor’ approach to actuarial gains and losses, recognising them in profit or loss, but went to another presentation on IFRS that said actuarial gains and losses should be recognised in other comprehensive income. The pension scheme had a market value of assets of £3.2 million and a present value of obligations of £3.5 million on 1 January 2020. There were no actuarial gains and losses brought forward into 2020. The details relevant to the pension are as follows (in £000): 

Required:

(a) Advise the finance director of why the presentation under US GAAP and IFRS presentation gave different treatments of actuarial gains and losses.

(b) Show how the pension scheme would be presented in the financial statements for the period 2020–2022 under IAS 19.

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Discount rate at start of year Expected rate of return on plan assets at start of year Current service cost Benefits paid Contributions paid Present value of obligations at 31 December Market value of plan assets at 31 December 2020 6% 10% 150 140 120 3,600 3,400 2021 5% 9% 160 150 120 3,500 3,600 2022 4% 8% 170 130 130 3,200 3,600