Pension scheme

Raven operates Defined benefit scheme

• 1 May 20x7 - the fair value of pension shceme was £2,830,000 and the PV of pension obligations was £2,966,000

• net defined benefit liability in SOFP of £136k

• During YE 30 Apr 20x8 - scheme received contributions of £575k from Raven (DR to staff costs)

• Current servcie cost of YE 30 Apr 20x8 = £390k

• Benefits improved during year, past service costs of £120k

• Amount benefits paid in year of £330k

• 30 Apr 20x8 estimates the FV of pension shceme assets to e £3,248,000 and PV of pension obligations at date £3,457,600

• 5% discount rate

DR interest cost 148,300

CR interest COST 141,500

DR P&L 390,000

DR P&L 120,000

DR OCI RESERVES 131,800  

CR NET BENEFIT OBLIGATION 648,600

Mistake:

DR NET BENEFIT OBLIGATION 575,000 CR P&L 575,000