In Computing the Service Cost Component of Pension Expense, the IASB

question 75

Multiple Choice

In computing the service cost component of pension expense, the IASB concluded that

• A)the accumulated benefit obligation provides a more realistic measure of the pension obligation on a going concern basis.
• B)a company should employ an actuarial funding method to report pension expense that best reflects the cost of benefits to employees.
• C)the defined benefit obligation using future compensation levels provides a realistic measure of present pension obligation and expense.
• D)all of these.

---

Definitions:

Theory

A system of ideas intended to explain something, based on general principles independent of the thing to be explained, often used as a framework for scientific or philosophical understanding.

Economic Stability

A state in which financial markets and the economy are able to function efficiently and enduringly, free from extreme fluctuations.

National Output

National Output is the total value of all goods and services produced by an economy over a specific period, typically measured as GDP.