- CFA Exams
- CFA Exam: Level I 2021
- Study Session 8. Financial Reporting and Analysis (3)
- Reading 28. Non-current (Long-term) Liabilities
- Subject 10. Defined Contribution and Defined Benefit Pension 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. |