I am addicted to this website. It's official.
So, I'm just going to swear off internet after business hours 🙂
-When you are amortizing prior service cost it goes into the expense (it's the A in SIRAGE) It doesn't hit the financial accounts directly. Amortization of PSC will affect the Pension Expense. Which is then posted to the GL.
– The Journal Entry to book Pension Expense once calculated is a debit to Pension Expense and CR Accr. Pension liability.
Once the entry is made to the books you compare the book balance of Accrued Pension Liability to the Actuary number for Pension Benefit Obligation. THIS is where the entry to OCI comes in.
You must true the books up to match PBO. DR/CR Accrued Pension Liability and offset to OCI.
You plug any difference to OCI. I don't think the difference goes against the liability, as the liability should equal the PBO. (but someone out there may want to double check that.)
@Sali – Welcome!
@Bluegirl -redstate 🙂 – I also like to write a summary in my own words for a final review of the major chapters. Like if I had to explain Pensions to my mom. I basically write an essay from the big picture, how they work, where the numbers come from, all the way to what journal entries to make. While I do this, I usually find a glitch here or there of something I don't quite understand (like where to put the difference when booking pension expense). It helps me identify any conceptual misunderstanding I have.
A:[73]97 F:[74]85 R:86 B:[74]82
*NINJA 10 Pt. COMBO & Yaeger*
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