On January 1, 2013, Tuesbury Corporation amended its defined benefit pension plan, resulting in $1,125,000 in past service costs. Tuesbury Corporation expects to receive economic benefits, through increased employee productivity and morale, over the next 15 years, at which point the employees will be eligible for their full pension benefits. Currently, all employees who are affected by the plan amendment are already vested.
(a) Calculate the past service costs to be included in the pension expense for the December 31, 2013 fiscal year, assuming that Tuesbury follows IFRS.
(b) Calculate the past service costs to be included in the pension expense for the December 31, 2013 fiscal year, assuming that Tuesbury follows ASPE and has elected to apply the deferral and amortization approach.