Ivanhoe Corp., a company whose stock is publicly traded, provides a noncontribut
ID: 2588640 • Letter: I
Question
Ivanhoe Corp., a company whose stock is publicly traded, provides a noncontributory defined-benefit pension plan for its employees. The company's actuary has provided the following information for the year ended December 31, 2018:Projected benefit obligation $ 748000 Accumulated benefit obligation 561000 Fair value of plan assets 880000 Service cost 250000 Interest on projected benefit obligation 26000 Amortization of prior service cost 64000 Expected and actual return on plan assets 88500
The market-related asset value equals the fair value of plan assets. No contributions have been made for 2018 pension cost. In its December 31, 2018 balance sheet, Ivanhoe should report a pension asset / liability of
Pension asset of $880000 Pension asset of $132000 Pension liability of $561000 Pension liability of $748000
Explanation / Answer
Pension asset / liability=Fair value of plan assets-Projected benefit obligation =880000-748000 = 132000 Option 2 Pension asset of $132000 is correct
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