In Pension Accounting, How Are Past Service Costs Accounted for Under

question 45

Multiple Choice

In pension accounting, how are past service costs accounted for under ASPE?

• A)Recognized in the balance sheet as a liability for the full amount.
• B)Recognized in the income statement as an expense for the full amount.
• C)Not recognized, but disclosed in a note.
• D)Included as part of pension expense and may be amortized over a specified period.

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Definitions:

Yield Rate

The annual income return on an investment, expressed as a percentage of the investment's price.

Annual Compound Rates

The rate of return that is earned on an investment or paid on a loan when interest is compounded on an annual basis.

RRSP

The Registered Retirement Savings Plan (RRSP) is a Canadian investment vehicle for individuals to save for retirement, with contributions being tax-deductible and growth being tax-deferred.

Prison Population

The total number of individuals incarcerated in a prison system at a given time.