Under IFRS,net Interest (Finance)expense (Revenue)with Respect to Defined Benefit Plans

question 59

Multiple Choice

Under IFRS,net interest (finance) expense (revenue) with respect to defined benefit plans is best described as follows:

• A) The actual return on plan assets must be reflected as a reduction of pension expense or as finance revenue.
• B) A discount rate is applied to the opening projected benefit obligation amount to impute an interest (finance) charge. This amount must be reflected as an increase to pension expense.
• C) The net interest (finance) expense (revenue) with respect to defined benefit plans is the difference between the opening fair values of the plan assets and projected benefit obligation. If the value of the projected benefit obligation exceeds the fair value of the plan assets on that date, there will be an increase to pension expense or finance (interest) expense. If the reverse is true, will be a decrease to pension expense or an increase to finance (interest) revenue.
• D) The net interest (finance) expense (revenue) with respect to defined benefit plans is the difference between the opening fair values of the plan assets and accumulated benefit obligation. If the value of the accumulated benefit obligation exceeds the fair value of the plan assets on that date, there will be an increase to pension expense. If the reverse is true, will be a decrease to pension expense.

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Definitions:

Lipset

Seymour Martin Lipset was a political sociologist known for his work on the social bases of politics, social stratification, public opinion, and the sociology of intellectual life.

Sociologist

A social scientist who studies the societal behaviors, structures, and functions of human societies and interactions.

Assimilation

A one-way process that occurs when a minority group sheds its differences and assumes the traits of the dominant group.

Dominant Culture

The prevailing cultural practices, beliefs, and values in a given society that influence norms and behaviors, often marginalizing minority groups.