Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation?
Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 1MC: The actuarial present value of all the benefits attributed by the pension benefit formula to...
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Question
36.
Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation?
Vested benefit obligation
Projected benefit obligation
Restructured benefit obligation
Accumulated benefit obligation
Expert Solution
Step 1
Answer:
The pension obligation is liability and it is to be paid once the employees retire.
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