CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

Which of the following statements is (are) true with respect to the amortization of transition assets or liabilities when computing pension obligations?

I. These transition amounts emerged simply as a result of corporations' adoption of FASB 87.
II. In accordance with the conservatism principle, any resulting transition assets had to be amortized while any resulting transition liabilities had to be expensed in the year it was incurred.
III. Any amount subject to amortization is required to be amortized over a period equal to the estimated average remaining service life of the work force.
IV. Transition asset or liabilities are off-balance-sheet items.
A. I, III and IV
B. II, III and IV
C. I, II and III
Explanation: II is incorrect because both transition assets and liabilities had to be amortized.

User Contributed Comments 2

User Comment
NIKKIZ What's a transition asset? The indicated LOS doesn't mention anything about them as far as I can see...
negimofa Searching for transition asset in CFA curriculum does not have any results as far as I can see?

Is there another term for these assets?
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