Bennet Co. is measuring its defined benefit obligation at 31 December 20X4. 95% of its employees provided another year of service, which was less than expected (i.e., turnover was higher than anticipated). During the year, there was an amendment to change the defined benefit plan. Which of these items represents past service cost?
A. The change in the obligation for another year of employees' service and the turnover percentage
B. The change in the obligation for plan amendment and the turnover percentage
C. The change in the obligation for only the employees' service for another year
D. The reduction in the number of employees covered and the plan amendment
C. The change in the obligation for only the employees' service for another year, as it relates to the additional service provided by the employees who remained with the company, which is a component of past service cost under IAS 19. The amendment to the defined benefit plan and the higher than anticipated turnover rate would also have an impact, but they would be considered as plan amendments and experience adjustments rather than past service cost strictly speaking.
