- CFA Exams
- CFA Level I Exam
- Study Session 5. Financial Reporting and Analysis (1)
- Reading 14. Employee Compensation: Post-Employment and Share-Based
- Subject 2. Accounting for Defined Benefit Plans
CFA Practice Question
When accounting for pension plans, the change in the PBO over a given year will not reflect the impact of:
A. Service cost for the year.
B. Change in the estimate of compensation growth.
C. Earnings of the pension fund for the year.
Explanation: The PBO over a given year will not reflect the impact of earnings of the pension fund for the year, but will reflect the impact of benefits paid during the year.
User Contributed Comments 1
| User | Comment |
|---|---|
| danlan2 | Earnings of the pension fund of the year will reflect the pension asset and not PBO. |