CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

To satisfy the minimum pension liability requirement under SFAS No. 87, the fair value of plan assets is subtracted from the projected benefit obligation (PBO). True or False?
Correct Answer: False

Since FASB decided that the minimum balance sheet liability should be recorded only for severely underfunded plans, the proper computation is the accumulated benefit obligation (ABO) less the fair value of plan assets. The ABO does not include future estimated compensation levels and is less than the PBO.

User Contributed Comments 0

You need to log in first to add your comment.