Joy Ltd operates a defined benefit post-retirement pension scheme for its

employees. The following information relates to the scheme for the year ended 31

December 2016:

The present value of the scheme obligations and the fair value of the scheme assets

at 1 January 2016 were 14,540,000 and 14,072,756 respectively. During the year,

total contributions paid into the scheme amounted to 789,563. The current and past

service costs were 310,659 and 22,250 respectively. The defined benefit

obligation is discounted using an appropriate corporate bond rate of 5.2%.

The present value of the scheme obligations and the fair value of the scheme assets

at 31 December 2016 were 14,774,018 and 14,585,283 respectively.

Required:

4.1

Calculate the figures that will appear in Joy Ltd.s financial statements for the

year ended 31 December 2016 in respect of the pension scheme.

IAS 19 Employee Benefits provides guidance on two types of post-employment

benefits - defined benefit (DB) and defined contribution (DC) plans.

Required:

4.2. Explain the differences between the two post-employment pension schemes.