Computing Minimum Pension Liability
Chateau Furniture and Cabinet Mfg. Co. computes the following balances for its defined benefit pension plan as of the end of its fiscal year.
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(in thousands)
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PBO
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$1,625
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ABO
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1,380
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FVPF
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1,460
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Market-related value of the pension fund (5-year weighted average)
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1,336
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Accrued pension cost
|
61
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Unrecognized prior service cost
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295
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Unrecognized net pension (gain)
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(191)
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1. According to FASB Statement No. 87, what is the amount of additional liability, if any, required to reflect the minimum pension liability?
2. Some FASB members believed that the minimum pension liability should consider expected future salary levels rather than the current levels. If this approach had been adopted in the standard, what additional liability adjustment, if any, would have been required?