- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 21. Understanding Income Statements
- Subject 6. Non-Recurring Items and Non-Operating Items
CFA Practice Question
If a company estimates that its expected return on pension plan assets will increase to 9.5% from 9.0%, this would be considered a(n) ______.
A. extraordinary gain
B. prior period adjustment
C. change in accounting estimate
Explanation: Such a change is a change in accounting estimate and disclosure of the effect on both net income and income before extraordinary items for the current period is required.
User Contributed Comments 3
| User | Comment |
|---|---|
| azramirza | IS IT BCUZ ITS AN ESTIMATE??? |
| gill15 | This might have been the worst question I've ever got wrong.... Time for abreak |
| farrahkame | amen to that |