S1: Under Ind AS 19, actuarial gains and losses on defined benefit plans are recognized in Other Comprehensive Income (OCI). S2: These actuarial gains and losses recognized in OCI are subsequently reclassified to the Profit and Loss account in future periods. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: Under Ind AS 19, actuarial gains and losses on defined benefit plans are recognized in Other Comprehensive Income (OCI). S2: These actuarial gains and losses recognized in OCI are subsequently reclassified to the Profit and Loss account in future periods. Which statement(s) is/are correct?
A. S2 only
B. Neither S1 nor S2
C. Both S1 and S2
D. S1 only
Answer: Option D
Solution (By JKSSB Mock Tests)
Ind AS 19 requires remeasurements (actuarial gains/losses) of defined benefit plans to be recognized in OCI. S2 is incorrect because these amounts are recognized directly in retained earnings and are NOT reclassified (recycled) to P&L in subsequent periods.
Explanation:
A one-sided error (e.g., posting to only one account) causes disagreement in trial balance. Other errors may not affect the trial balance agreement.
No comments yet. Be the first to start the discussion!