Significant Differences Can Occur in Required Funding of Pension Funds

question 4

Multiple Choice

Significant differences can occur in required funding of pension funds due to different discount rates required under IFRS and U.S.GAAP,which of the following is true?

• A)The discount rates under IFRS are determined by reference to market yields at the balance sheet date on high quality corporate bonds.
• B)The discount rate under U.S.GAAP should reflect the rates at which pension benefits could be effectively settled.
• C)All of the above
• D)None of the above

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Definitions:

Price-Earnings Ratio

A valuation metric for a company, calculated by dividing its current share price by its per-share earnings.

Net Income

The total profit of a business after all expenses, including taxes and operating costs, are subtracted from total revenues.

Weighted-Average Common Shares

The weighted-average common shares are calculated to represent the number of shares outstanding over a period, adjusted for changes such as stock splits.

Income Stocks

Stocks that regularly pay high dividends, typically associated with well-established companies with stable earnings.