Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation?
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36.
Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation?
Answer:
The pension obligation is liability and it is to be paid once the employees retire.
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- The actuarial present value of all the benefits attributed by the pension benefit formula to employee service rendered before a specified date based on expected future compensation levels is the: a. projected benefit obligation b. prior service cost c. service cost d. accumulated benefit obligationb. How does each component of pension expense affect pension expense during the period (increase, decrease, or uncertain)? c. What is the difference between the accumulated pension obligation and the projected pension obligation? d. What determines whether a pension plan is underfunded or overfunded?Which component of Kensington’s periodic pension cost would be shown in OCI ratherthan P&L?A . Service costB . Net interest (income) expenseC . Remeasurements
- what is the difference between Accumulated Benefit Obligation and Projected Benefit Obligation? How do you determine the Plan Asset/Liability? How do you compute the Pension Expense?What is meant by “prior service cost”? When is prior servicecost recognized as pension expense?Net interest cost is a component of pension expense under IFRS. How is net interest cost calculated? Select one: O a. The increase in the DBO over the period, net of the increase in the plan assets over the period. O b. Interest expense on the DBO, net of actual interest income earned on plan assets. O c. Interest expense on the defined benefit obligation (DBO), net of expected interest income earned on plan assets. O d. The increase in the DBO over the period, net of the increase in the plan assets over the period.
- Which of the following is a characteristic of the accumulated benefit obligation measurement? Group of answer choices It considers only vested employees. It considers only current employees. It does not use projected future salary levels. It is required by GAAP for measurement of the pension obligation.In computing the interest component of pension expense, what interest rates may be used?How does accounting for postretirement benefits similar in most respects to accounting for pension benefits?
- Which are the components that are included in the pension expense?Question text The computation of pension expense includes all the following except Select one: 13 a. interest on plan assets b. all of these are included C. service cost component measured using current salary levels. d. interest on defined benefit obligation.look over the three most important components of the pension expense. The treatment of expected and actual return on plan assets, particularly when the actual return is greater than the expected, the amortization of prior service cost and the unexpected gain/ loss. Discuss the accounting treatment of these items with suitable examples.