1. Present value of defined benefit obligation
- Present value of expected future payments required to settle the obligation resulting from employee service in the current and prior periods.
- Projected unit credit method is used to measure the obligation, and this requires actuarial assumptions.
- Actuarial assumptions include discount rate, salary increase rate, and withdrawal rate.
- Discount rate : determined by reference to market yields at the end of the reporting period on high quality corporate bonds.
- Salary increase rate: estimates of future salary increase take account of inflation, seniority, promotion and other relevant factors.
- Withdrawal rate : generally determined based on historical experience.