Centurion Manufacturing Ltd. has a defined benefit pension plan that covers its production employees. On...
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Centurion Manufacturing Ltd. has a defined benefit pension plan that covers its production employees. On September 1, 2010, Centurion initiated this plan and immediately contributed $12 million toward covering the costs of the plan because the plan provided for retroactive benefits which the actuary valued at $12 million.
You have the following information with respect to the plan as at August 31, 2020 (10 years after plan initiation).
Plan assets at market value $ 29 million
Accrued benefit obligation 25.8 million
Balance sheet defined benefit pension asset 3.2 million
Information for fiscal year ended August 31, 2021:
Pension benefit obligation at year-end $ 27.3 million
Market value of plan assets at year-end 33.0 million
Current service cost (accrued evenly through year) 2.7 million
Contributions to plan assets made February 28, 2021 1.8 million
Benefit payments to pensioners (paid evenly through year) 0.9 million
Expected earnings rate on plan assets and discount
rate on obligations 8%
Required:
Prepare the pension worksheet for year ended August 31, 2021, assuming Centurion reports under IFRS. (Hint- Interest on ABO and expected returns on PA are related to the cash flows and accrual dates).
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