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Basic Question 17 of 24
Under the U.S. GAAP, prior service costs due to a pension plan amendment are expensed in the year the amendment occurred. True or False?
User Contributed Comments 3
| User | Comment |
|---|---|
| dream007 | Analyst notes, common. This is only true for US GAPP. Prior service cost is expenses in the year it is recognized under IFRS. |
| birdperson | is what dream007 said true or false? |
| daverco | From the curriculum text: Under IFRS, service costs (including both current service costs and past service costs) are recognised as an expense in P&L Under US GAAP, reported under OCI and amortized to P&L over the life of affected employees. |
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Learning Outcome Statements
explain and calculate measures of a defined benefit pension obligation (i.e., present value of the defined benefit obligation and projected benefit obligation) and net pension liability (or asset);
describe the components of a company's defined benefit pension costs;
explain and calculate the effect of a defined benefit plan's assumptions on the defined benefit obligation and periodic pension cost;
CFA® 2025 Level II Curriculum, Volume 2, Module 11.