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How does a company measure the net pension benefit liability (asset) to report on the balance...

How does a company measure the net pension benefit liability (asset) to report on the balance sheet under IFRS and U.S. GAAP?

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1.Under IFRS, the net amount recognized as a defined pension benefit liability (or asset) ismeasured as:

+ Present value of the defined benefit obligation (PVDBO)

-Fair value of plan assets (FVPA)

If the resulting amount is negative (net pension asset), the amount of asset to be reported on the balance sheet is limited to the asset ceiling, which is which is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.

2.Under U.S. GAAP, the pension liability or asset is simply measured as:

+ Present value of the defined benefit obligation (PVDBO)

-Fair value of plan assets (FVPA)

There is no limit to the amount recognized as a net pension asset.

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