Required information

Learning Objective $17-12$ Discuss the primary differences between U$.$S$.$ GAAP and IFRS with respect to accounting for postretirement benefit plans.

Skip to question

$[$The following information applies to the questions displayed below.$]$

Under both U$.$S$.$ GAAP and IFRS we report all changes in the obligation and in the value of plan assets as they occur. The ways the changes are determined and reported are different, though, for some of the changes. The changes that constitute the components of the net pension cost are reported separately as $($a$)$ the service cost, $($b$)$ the net interest cost$/$income$,$ and $($c$)$ remeasurement gains or losses. Under IFRS, past service cost is combined with current service cost and reported as service cost within the income statement rather than as a component of other comprehensive income as it is under U$.$S$.$ GAAP. Under IFRS, gains and losses are not recycled from other comprehensive income as is required under U$.$S$.$ GAAP $($when the accumulated net gain or net loss exceeds the $10\%$ threshold$).$ Also, the interest cost and return on plan assets are replaced by net interest cost$/$income $($interest rate times the difference between the DBO and plan assets$).$

Which of the following statements about the reporting of pension costs under IFRS are true?

Note: Select all that apply.

Check All That Apply

Service cost includes current service costs and past service costs $($if any$).$

Service cost includes current service costs and past service costs $($if any$).$

Service cost includes current service costs, past service costs $($if any$),$ and the net interest cost.

Service cost includes current service costs, past service costs $($if any$),$ and the net interest cost.

Service cost includes current service costs, past service costs $($if any$),$ net interest cost, and any remeasurement cost.

Service cost includes current service costs, past service costs $($if any$),$ net interest cost, and any remeasurement cost.

Remeasurement cost includes remeasurements of service costs caused by changes in assumptions, gains and losses arising from experience differing from what was assumed, and investment gains and losses on plan assets.