The IASB's 2011 Amendment to IAS 19 Removed the Smoothing

question 65

Essay

The IASB's 2011 amendment to IAS 19 removed the smoothing of devices in pension accounting, which means that companies will have to recognize all changes in their projected benefit obligation and plan assets in the current period. These changes will be recorded in pension expense or other comprehensive income. With this change pension expense will have two components. Indicate that those two components are and provide a brief explanation of each.

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Definitions:

Variable-interval

A variable-interval schedule in psychology refers to a reinforcement strategy where a response is rewarded after an unpredictable amount of time has passed.

Secondary Reinforcer

A learned stimulus that acquires its reinforcing qualities through association with primary reinforcers.

Primary Reinforcer

A stimulus that is naturally satisfying or rewarding, like food or water, which does not require learning to be effective.

Fixed-ratio

A schedule of reinforcement where a response is reinforced only after a specified number of responses, commonly used in behavior analysis.