Question 4
ICAN
•
2026
•
STRATEGIC BUSINESS REPORTING
•
mixed
Case Stimulus
Omolewa Nigeria Plc operates a defined benefit pension plan for its employees. The company’s actuarial information received for the year ended December 31, 2024, revealed that the present value of defined benefit obligation (DBO) at January 1, 2024, was N180million, while the fair value of the plan’s assets was N160million. The previous (due to benefit change) and current service costs were N10million and N25million respectively. Interest cost on obligation was 6% while interest income on plan assets was 5%. The company paid N20million employer contributions during the year while, benefits paid to retired employees was N15million. At December 31, 2024, the present value of DBO amounts to N210million and a fair value of plan assets of N175million.
Requirements
(
a
)
Calculate the net defined benefit liability or asset to be recognised in the statement of financial position as at December 31, 2024.
(
b
)
Determine the total defined benefit cost to be recognised in the statement of profit or loss for the year.
(
c
)
Explain the accounting treatment for re-measurements under IAS 19 “Employee Benefits” and identify the amount (if any) of re-measurement gain or loss for the year.
Detailed Solution & Marking Scheme
Get the step-by-step solution,
key points required by examiners
and detailed marking guidance
through the Edcrib AI Tutor.
Reveal Answer
About This Question
This is
Ican
2026
Strategic Business Reporting
Question 4.
It is one of the
mixed
questions from the
2026
Ican
Strategic Business Reporting
examination.