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.

---

Definitions:

Rate Of Return

The gain or loss of an investment over a specified period, expressed as a percentage.

Cash Flow Growth Rate

A measure of how fast a company's cash flow increases over a certain period, indicating financial health.

Timeframe

A timeframe refers to the specific period during which an event occurs or is planned to take place, often used in planning and scheduling contexts.

Required Rate Of Return

The lowest annual gain percentage that persuades individuals or firms to allocate resources to a particular security or project.