How Does IFRS Differ from GAAP When Accounting for Defined-Benefit

question 47

Multiple Choice

How does IFRS differ from GAAP when accounting for defined-benefit pension plans?

• A) IFRS requires current period expensing of prior service costs while GAAP amortizes prior service costs over time.
• B) GAAP allows companies to add interest cost and deduct expected return from pension expense in non-operating income. IFRS allows the net interest (from PBO and plan assets) to be reported in operating or financing income.
• C) GAAP requires separate rates of interest for the PBO and expected return on plan assets. IFRS uses the same rate for both.
• D) GAAP amortizes current year net actuarial gains and losses using the corridor approach, while IFRS does not amortize actuarial gains/losses. IFRS reports actuarial gains/losses in other comprehensive income.

---

Definitions:

Capturing Forts

The military action of taking control of fortified enemy positions.

Different Allergen

A substance distinct from others that can induce an allergic reaction in certain individuals.

Food Contains Peanuts

A label indicating that a food product includes peanuts in its ingredients, important for allergy awareness.

Will Cook Supper

Indicates an action someone is intending to perform in the context of preparing the evening meal.