Cahal-Michael Company has a postretirement health care benefit plan. On January 1, 2016, the following planrelated data were available: ($ in 000s) Net loss–AOCI $ 336 Accumulated postretirement benefit obligation 2,800 Fair value of plan assets 500 Average remaining service period to retirement 14 years (same in previous 10 yrs.) The rate of return on plan assets during 2016 was 10%, although it was expected to be 9%. The actuary revised assumptions regarding the APBO at the end of the year, resulting in a $39,000 increase in the estimate of that obligation. Required: 1. Calculate any amortization of the net loss that should be included as a component of postretirement benefit expense for 2016. 2. Assume the postretirement benefit expense for 2016, not including the amortization of the net loss component, is $212,000. What is the expense for the year? 3. Determine the net loss or gain as of December 31, 2016.
Cahal-Michael Company has a postretirement health care benefit plan. On January 1, 2016, the following planrelated
data were available:
($ in 000s)
Net loss–AOCI $ 336
Accumulated postretirement benefit obligation 2,800
Fair value of plan assets 500
Average remaining service period to retirement 14 years (same in previous 10 yrs.)
The rate of return on plan assets during 2016 was 10%, although it was expected to be 9%. The actuary revised
assumptions regarding the APBO at the end of the year, resulting in a $39,000 increase in the estimate of that
obligation.
Required:
1. Calculate any amortization of the net loss that should be included as a component of postretirement benefit
expense for 2016.
2. Assume the postretirement benefit expense for 2016, not including the amortization of the net loss component,
is $212,000. What is the expense for the year?
3. Determine the net loss or gain as of December 31, 2016.
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