At January 1, 2017, Van Gogh Corp.'s defined benefit pension plan, under IFRS, had a defined benefit obligation of $100,000, while the fair value of the plan assets was $120,000.During 2017, the plan's current service cost was $150,000; past service costs were $80,000; Van Gogh contributed $110,000 to the plan; the actual and expected return on the plan assets was $9,000; and benefits paid to retirees were $95,000.What is the fair value of the plan assets at December 31, 2017?

Question

Quizplus · Accepted Answer

The fair value of the plan assets at December 31, 2017, is calculated as follows: Starting with the fair value at January 1, 2017, which is $120,000, add the contributions made by Van Gogh ($110,000) and the actual return on plan assets ($9,000), then subtract the benefits paid to retirees ($95,000). This results in $120,000 + $110,000 + $9,000 - $95,000 = $144,000.