The following information is in regard to Saverio Corp.'s defined benefit pension plan.
Defined benefit obligation, 1/1/17 (before amendment) .............. $239,000
Plan assets, 1/1/17 ........................................................... 155,000
Discount rate ..................................................................... 10%
Annual pension service cost ................................................ 13,000
Actual return on plan assets .................................................. 7,750
On January 1, 2017, the company amended its pension plan, which resulted in a reduction in prior benefits for current employees. The present value of the reduced benefits is $34,000.
Instructions
(a) Calculate the pension expense that will be reported in net income for 2017 if Saverio applies IFRS.
(b) Calculate the pension expense that will be reported in net income for 2017 if Saverio applies ASPE.