Question

GNC Corporation includes the following information regarding their defined benefit pension plan (calculated in hundreds of thousands of dollars) for 2018:

Actual return on plan assets	$ 9
Contributions from employer	20
Benefits paid to retirees	10
Actuarial loss due to change in actuarial assumptions	15
Current service cost	19
Opening balance, DBO	100
Opening balance, plan assets	100

At the end of the year, GNC Corporation revised the terms of its pension plan, which resulted in past service costs of $35.

Required:

1. Assuming that GNC applies an 11% interest cost and follows IFRS, determine the company’s 2018 pension expense and the effect of the pension plan on the company’s shareholders’ equity.

Answer 1