2007年12月ACCACorporateReporting(P2)考题解析sectionB.docx

3 3 1 1 Section B -TWO questions ONLY to be attempted 2 . Macaljoy, a public limited company, is a leading support services company which focuses on the building industr y. The company would like advice on how to treat certain items under IAS19, ‘ EmployeBenefits 'and IAS37 Provisions, Contingent Liabilities and Contingent Assets 'The company operates the Macaljoy (2006) Pension Plan which commeneed on 1 November 2006 and the Macaljoy (1990) Pension Plan, which was closed to new entrants from 31 October 2006, but which was open to future service accrual for the employees already in the scheme. The assets of the schemes are held separately from those of the company in funds under the control of trustees. The following information relates to the two schemes: Macaljoy (1990) Pension Plan The terms of the plan are as follows: employees con tribute 6% of their salaries to the pla n Macaljoy con tributes, curre ntly, the same amount to the pla n for the ben efit of the employees On retirement, employees are guaranteed a pension which is based upon the number of years service with the company and their final salary The following details relate to the plan in the year to 31 October 2007: $m TOC \o "1-5" \h \z Present value of obligation at 1 November 2006 200 Present value of obligation at 31 October 2007 240 Fair value of plan assets at 1 November 2006 190 Fair value of plan assets at 31 October 2007 225 Current service cost 20 Pensi on ben efits paid 19 Total contributions paid to the scheme for year to 31 October 2007 17 Actuarial gains and losses are recog ni sed in the ‘ statement recog ni sed in come and expense '. Macaljoy (2006) Pension Plan Under the terms of the plan, Macaljoy does not guarantee any return on the con tributi ons paid into the fund. The compa ny 'slegal and con structive obligati on is limited to the amount that is contributed to the fund. The following details relate to this TOC \o "1-5" \h \z scheme: $m Fair value of plan assets at 31 October 2