How to calculate the fair value of the pension plan asset?
The fair value of plan assets represents the cumulative investments (plan assets) that are being held for retiree’s (employees) and will be paid out once the pension allows for it.
The formula below illustrates how to calculate the ending fair value of plan assets, which would be recorded on the asset section of the balance sheet:
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How to calculate the project benefit obligation?
Basically, you need to roll forward the obligation balance from the beginning of the year (i.e. which equals end of prior year), and then factor in the items listed in the rollforward below. That will get you to your ending PBO, and that is what is recorded on the balance sheet as the ending liability […]