Question #34

Reading: Reading 9 Employee Compensation - Post-Employment and Share-Based

PDF File: Reading 9 Employee Compensation - Post-Employment and Share-Based.pdf

Page: 14

Status: Incorrect

Correct Answer: A

Your Answer: C

Part of Context Group: Q34-36 First in Group
Shared Context
- As of January 1st, 2007, the fair value of plan assets was $19 million. Which three components are necessary to calculate the fair value of the plan assets at the end of the year? A) actual return on assets, employer contributions, and benefits paid. B) service cost, interest cost, and benefits paid. C) expected return on plan assets, employer and participant contributions, and benefits paid.
Question
Current U.S. GAAP pension accounting standards require public companies to report which of the following in the balance sheet?
Answer Choices:
A. The expected return on plan assets
B. The pension liability adjusted for unrecognized items
C. The funded status of the plan
Explanation
The current standard requires companies to report the funded status of the plan, which is the difference between the PBO and the fair value of plan assets.
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