The following information relates to the Montigo Superannuation Plan, which is a defined benefit scheme. Amounts given for all assets are at net market value.

At balance date the scheme is owed from the current period.

During the period shares in listed companies that had a net realisable value of $7 million at the beginning of the period were sold for $8.5 million. Shares were purchased during the period for $3 million.
The fund has not had an actuarial review undertaken as at balance date. What are the net assets available to pay benefits at 30 June 2003?

Question

The following information relates to the Montigo Superannuation Plan, which is a defined benefit scheme. Amounts given for all assets are at net market value.

At balance date the scheme is owed from the current period.

During the period shares in listed companies that had a net realisable value of $7 million at the beginning of the period were sold for $8.5 million. Shares were purchased during the period for $3 million.
The fund has not had an actuarial review undertaken as at balance date. What are the net assets available to pay benefits at 30 June 2003?

Quizplus · Accepted Answer

- The net realisable value of shares at the beginning of the period was $7 million and they were sold for $8.5 million, resulting in a gain of $1.5 million.
- Shares were purchased for $3 million during the period.
- Therefore, the total gain from shares during the period was $1.5 million - $3 million = -$1.5 million.
- The net assets available to pay benefits at 30 June 2003 can be calculated as:
Total assets at net market value - total liabilities owed from the current period
= $28 million - $5.502 million
= $22.498 million
Thus, the correct answer is B.

The Following Information Relates to the Montigo Superannuation Plan, Which