(c) Discount rate for obligations: This is the unwinding of the present value of the pension liability due to employees who are one year closer to retirement at the end of the accounting period. A charge of £52,000 (4% x £2.6 million x 6/12) should therefore be made in the income statement. Because it relates to a present value, I have added this to finance costs, but once again IAS19 is silent on the issue. The actuarial difference reflects that some of the above figures are estimates, and also the increase in the net liability in the pension fund to £670,000. (£2.75m - £2.08m). This figure will appear in the statement of financial position as a liability. Per appendix 5 there is a net actuarial difference of £193,000. IAS 19 allows a number of methods of dealing with gains and losses. Dipper’s accounting policy in relation to pensions is to recognise immediately gains and losses. IAS 19 permits immediate recognition in both profit or loss and as other comprehensive income. Goodwill impairment The goodwill impairment should be charged to the income statement rather than other comprehensive income. This will impact on EPS Summary of adjustments As a result of these adjustments EPS has increased from £1.21 to £1.41 per share from the previous year. The diluted earnings per share is £1.38, and therefore should be disclosed as lower than basic. EPS.
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