Presented below is pension information related to Mango Ltd. at December 31, 2020. The corporation uses IFRS. $\begin{array}{ll}
\text{ Defined benefit obligation ................................. } & \$ 3,500,000 & Cr \
\text{Plan assets (at fair value) ................................} & 2,500,000 & Dr \
\text{ Past service costs }................................................ & 100,000 & \
\text{ Contributions to plan }........................................... & 200,000 & \

\end{array}$ The amount to be reported as the net defined benefit liability at December 31, 2020 is

Question

Presented below is pension information related to Mango Ltd. at December 31, 2020. The corporation uses IFRS. $\begin{array}{ll}
\text{ Defined benefit obligation   ................................. }  & \$ 3,500,000 & Cr \
\text{Plan assets (at fair value)   ................................}  & 2,500,000 & Dr \
\text{  Past service costs  }................................................ & 100,000 & \
\text{ Contributions to plan  }...........................................   & 200,000 & \

\end{array}$ The amount to be reported as the net defined benefit liability at December 31, 2020 is

Quizplus · Accepted Answer

The net defined benefit liability is calculated as the present value of the defined benefit obligation (DBO) minus the fair value of plan assets. At December 31, 2020, the DBO is $2,500,000 and the fair value of plan assets is $1,500,000. Therefore, the net defined benefit liability is $1,000,000 ($2,500,000 - $1,500,000).

Presented Below Is Pension Information Related to Mango Ltd The Amount to Be Reported as the Net Defined Benefit