- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 8. Topics in Long-Term Liabilities and Equity
- Subject 5. Financial Reporting for Post-Employment and Share-Based Compensation Plans
CFA Practice Question
To determine the funded status of a pension plan, the reader of a financial statement should refer to the ______.
B. balance sheet
C. income statement
A. footnote disclosures
B. balance sheet
C. income statement
Correct Answer: B
The balance sheet reports a company's net funded position, with the separate components (i.e., plan assets and plan liabilities) disclosed in the footnotes.
User Contributed Comments 4
| User | Comment |
|---|---|
| yly14 | prepaid pension expenses are show on the bs, able to determine the funded status of the plan. |
| quanttrader | funded status in balance sheet -- specifics found in footnote. |
| farhan92 | pensions are a liability so on b/s? |
| davidt876 | farhan, the pension could overfunded (assets of plan > PBO) and recorded as an asset, or the pension could be underfunded (assets of plan < PBO) and recorded as a liability |