Answered: A pension asset is reported when

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

42.

A pension asset is reported when

the accumulated benefit obligation exceeds the fair value of pension plan assets, but a prior service cost exists.

the accumulated benefit obligation exceeds the fair value of pension plan assets.

pension plan assets at fair value exceed the projected benefit obligation.

pension plan assets at fair value exceed the accumulated benefit obligation.

Expert Solution

Step 1

Answer:

Pension asset is defined as the asset that is created due to pension plan for purpose of pension benefits. It is created when the fair value is higher than the present value.

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