- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 11. Employee Compensation: Post-Employment and Share-Based
- Subject 2. Accounting for Defined Benefit Plans
CFA Practice Question
The actual return on plan assets should increase annual pension expense. True or False?
Correct Answer: False
User Contributed Comments 5
| User | Comment |
|---|---|
| bmeisner | What if the actual return is negative? The question should be true, false or uncertain with uncertain the correct answer. |
| sags | and in anyway we use long term rate of return on assets to compute pension expense and not actual return on plan assets.... |
| Nightsurfer | Pension expense uses expected return not actual return. |
| kodali | Good point NightSurfer ! |
| emilhaque | The actual return could increase or decrease annual pension expense. It "should" not automatically increase it. |