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Components of a Company’s Defined Benefit Pension Periodic Cost

October 15, 2016
IFRS Component Recognition US GAAP Component Recognition
Service Cost P&L
Net Interest Income/Expense P&L as Net Pension Asset or Liabiity X Discount Rate
Remeasurements: Net return on plan assets and actuarial gains & loses OCI not Amortized subsequently in P&L

Net Return = Actual Return – (Plan Assets X Interest Rate)

Current Service Cost P&L
Past Service Cost OCI subsequently amortized in P&L
Interest Expense or Pension Obligation P&L
Expected Return on Plan Assets P&L as Asset X Expected Return
Actuarial Gains and losses including the difference between the actual and expected return on plan assets Either Immediately in P&L or OCI and amortized using corridor or faster method.

Difference = Actual Return – (Plan Assets X Expected Return)

One Comment
  1. This chart is too dense, I revised it to be two separate paper index cards one for IFRS and one for USGAAP.

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