At 1st April, 20X0, the fair value of the Plan Assets was ₹ 10,00,000. The Plan paid benefits of ₹ 1,90,000 and received contributions of ₹ 4,90,000…

CA Final · Financial Reporting · MTP · November 2026
At 1st April, 20X0, the fair value of the Plan Assets was ₹ 10,00,000. The Plan paid benefits of ₹ 1,90,000 and received contributions of ₹ 4,90,000 on 30th September, 20X0. The company computes the Fair Value of Plan Assets to be ₹ 15,00,000 as on 31 March, 20X1 and the Present Value of the Defined Benefit Obligation amount to ₹ 14,79,200 on the same date. Actuarial losses on defined benefit obligation were ₹ 6,000. Compounding happens half-yearly. The normal interest rate for 6 months period is 10%, while the effective interest rate for 12 months period is based on the following data: Particulars % Interest and Dividend Income, after tax payable by the fund 9.25 Add: Realized and Unrealized Gains on Plan Assets (after tax) 2.00 Less: Administration Costs (1.00) Expected Rate of Return 10.25 Determine actual return and expected return on plan asset. Also compute amount to be recognized in 'Other Comprehensive Income' in this case.

Suggested Answer and Working Notes:

Computation of Expected Return on Plan Assets Particulars ₹ Return on ₹ 10,00,000 for 20X0-20X1 at 10.25% = ₹ 10,00,000 × 10.25% 1,02,500 Add: Return on ₹ 3,00,000 for 6 months at 10% Normal Rate = [3,00,000 (Inflow ₹ 4,90,000 less Payments ₹ 1,90,000) × 10% × 6/12)] 15,000 Expected Return on Plan Assets 1,17,500 Computation of Actual Return on Plan Assets Particulars ₹ Fair Value of Plan Assets at the year-end - 31 March 20X1 15,00,000 Less: Fair Value of Plan Assets at the beginning - 1 April 20X0 (10,00,000) Less: Contributions received during the year 20X0-20X1 (4,90,000) Add: Benefits paid during the year 20X0-20X1 1,90,000 Actual Return on Plan Assets 2,00,000 Computation of Net Actuarial Gain Particulars ₹ Actual Return on Plan Assets 2,00,000 Less: Expected Return on Plan Assets (1,17,500) Actuarial Gain on Plan Assets 82,500 Less: Actuarial Loss on Defined Benefit Obligation (given) (6,000) Net Actuarial Gain to be recognized in 'OCI' 76,500

Topics: Ind AS 19

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic