- 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
In an employer-sponsored defined benefit pension plan, the interest cost included in the pension expense represents the ______.
B. increase in the projected benefit obligation due to the passage of time
C. increase in the fair value of plan assets due to the passage of time
A. effective discount rate times the unamortized balance of prior service costs
B. increase in the projected benefit obligation due to the passage of time
C. increase in the fair value of plan assets due to the passage of time
Correct Answer: B
User Contributed Comments 2
| User | Comment |
|---|---|
| HenryQ | It is calculated as discount rate * beg. PBO. |
| johntan1979 | To be more precise, it's prior period discount rate. |