Return on the Pension Fund-Expected and Actual
Rasband Photography has a pension plan covering its 100 employees. Rasband anticipates a 11% return on its pension fund. The fund trustee furnishes Rasband with the following information relating to the pension fund for 2008:
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January 1
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FVPF
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$1,500,000
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|
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Market-related value of the pension fund
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|
|
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(5-year weighted average)
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1,350,000
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During year
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Actual return on the pension fund
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110,000
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December 31
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FVPF
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1,620,000
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|
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Market-related value of the pension fund
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|
|
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(5-year weighted average)
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1,480,000
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Compute the difference between the actual and expected return on the pension fund. How should the difference be treated in determining pension expense for 2008? Rasband bases expected return on the market-related value of the pension fund.