What Is True of the Interest Cost Component of the Pension

question 8

Multiple Choice

What is true of the interest cost component of the pension expense?

• A)ASPE specifies that enterprises should use the yields on high-quality corporate bonds.
• B)IFRS specifies that enterprises should use the yields on high-quality short-term corporate bonds.
• C)It represents the increase in the pension obligation due to the passage of time.
• D)IFRS specifies that enterprises should use the yields on medium-quality corporate bonds.

---

Definitions:

IFRS

International Financial Reporting Standards are a set of accounting rules and standards developed by the International Accounting Standards Board (IASB) that guide the preparation of financial statements globally.

EU

A political and economic union of 27 European countries that are located primarily in Europe, aimed at fostering economic cooperation and collective regulation.

Securities Commissions

Governmental or regulatory bodies responsible for overseeing and regulating the securities and investments market, ensuring fair practices.

Enforcement Agencies

Governmental or authoritative bodies responsible for ensuring compliance with laws, regulations, and standards within their jurisdiction.