Answered: true or false Only one discount rate…

true or false Only one discount rate is used when measuring the defined benefit obligation under the projected unit credit method.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 17Q: What is the difference between the discount rate used for net present value and the internal rate of...

See similar textbooks

Related questions

Q: Define the term recovery allowance percentages?

A: Tax based depreciation rates are provided by the IRS and are called MACRS which is the modified…

Q: Decreases in the projected benefit obligation due to an increase in interest rate are called (enter…

A: A projected benefit obligation (PBO) is an actuarial measurement of what a company will need at the…

Q: Discount received is an example of: Indirect income Direct Income Net Income General Incom

A: Discount received indicate the situation where the seller allows some relaxation on the price of…

Q: 1. The interest cost component of the net defined benefit cost is determined using a. the settlement…

A: "Since you have asked multiple questions, we would be solving the first question. If you want any…

Q: How is the Accumulated Benefit Obligation (ABO) different from the Projected Benefit Obligation…

A: Accumulated Benefit Obligation and Projected Benefit Obligation both are terms used in the pension…

Q: What is the difference between spot rates andforward rates? When is the forward rate at a premium to…

A: Spot rates are the rates that prevail in the cash market or the rates that are applicable today.…

Q: explain the application of compounding measures: effective or nominal / interest or discount rates,…

A: The sum that the lender demands from the borrower in addition to the principal amount is known as…

Q: When using the internal rate of return method, interest payments should OA. not be discounted OB. be…

A: While using Internal rate of return calculation we have to discount each element of income and cost…

Q: Differentiate between the accumulated benefit obligation and the projected benefit obligation.

A: ABO (Accumulated benefit obligation) and PBO (Projected benefit obligation) are similar in most of…

Q: In computing the ending balance of defined benefit obligation, which of the following is deducted…

A: Defined benefit obligation is the present value of future pension liabilities of a company which it…

Q: Define each of the following terms:e. Simple interest; discount interest; add-on interest

A: Simple interest: As the name indicates it is a simple interest computed on the amount of principal.…

Q: Which of the statements is correct? a)FV of annuity due is greater than FV of regular annuity. b)FV…

A: Annuity means finite no. of payments which are same in size and made in equal intervals for the…

Q: Which statement is incorrect? a. PFRS mandates the use of projected unit credit method of…

A: IAS 19 (International Accounting Standard 19)- Employee Benefit:- These standards included employee…

Q: Describe the process of using the risk-adjusted discount rateto calculate the net present value?

A: Net present value (NPV) is the excess of present value of cash inflows over the present value of…

Q: Define discount percentage (credit)

A: The discount rate is the amount paid on debit and credit card payments to a dealer for payment…

Q: The contractual interest rate is alway state as a

A: Contractual Interest Rate Contractual interest rate refer as the rate which helps to determine the…

Q: The projected benefit obligation (PBO) is best described as the a. Present value of benefits accrued…

Q: Loans and receivable should be measured subsequent to initial recognition at * a. Amortized cost…

A: The question is multiple choice question. Required Choose the Correct Option.

Q: Which of the following does not increase the Projected Benefit Obligation? Actuarial loss on…

A: Solution: Following would increase the projected benefit obligation: 1. Actuarial loss on benefit…

Q: The process that determines the present value of a single payment or stream of payments to be…

A: Discounting : Discounting determines how much will be the worth of money if it is received today…

Q: What is the difference between cap rate and discount rate? Explain in detail and no plagiarism .

A: In the valuation of the real estate there are two types of the interest rate one is discount rate…

Q: . Which of the following may not be equal to the contract rate of interest? a. stated rate b.…

A: Contract rate of interest is the defined rate of interest on bonds, notes or loan.

Q: explain the application of annuities with discount rates (usinf formulas)

A: Annuities are a series of equal payments made at regular intervals. The concept of discounting…

Q: In determining the present value of the prospective benefits (often referred to as the defined…

A: Defined Benefit Obligation: A defined benefit plan is a sort of post-employment benefit that ensures…

Q: clarely distinguish between nominal internest rate and effective interest rate

A: Nominal interest rate are simple interest rates that don't consider the effect of compounding.…

Q: How is the Accumulated Benefit Obligation (ABO) different from the Projected Benefit Obligation…

A: The value that is used for the compensations of the employees is the only difference between the…

Q: "Fisher effect defines the relationship between nominal rates, real rates, infiation, default…

A: Fischer effect:- It is an important concept of economics that describes the releationship between…

Question

true or false

Only one discount rate is used when measuring the defined benefit obligation under the projected unit credit method.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

When using the internal rate of return method, interest payments should A. not be discounted B. be included C. not be included D. be discounted for the purposes of calculation.
What is the difference between the discount rate used for net present value and the internal rate of return methods?
explain the application of annuities with discount rates (usinf formulas)
explain the application of compounding measures: effective or nominal / interest or discount rates, when are equivalent (using formulas)
In the amortization table, how is the amortization of discount of premium computed?
1. Which statement is incorrect? a. PFRS mandates the use of projected unit credit method of determining the present value of the defined benefit obligation. b. The discount rate used in making actuarial assumptions shall be determined by reference to the market yield on high quality bonds at the end of reporting period. c. Current service cost is the increase in the present value of the defined benefit obligation resulting from employee service in the previous period. d. In accounting for other long-term employee benefits, Current service cost, past service cost and any gain or loss on settlement are fully recognized through profit or loss. e. none of the above 2.Which statement is incorrect? a. Share options are equity settled share based payment transaction and should be reported as expense using the fair value method on the date of grant. b. Compensation expense is immediately recognized under PFRS 2 in circumstances when options are granted for prior service, and the options are…
2. Which of the following may not be equal to the contract rate of interest? a. stated rateb. nominal ratec. face rated. effective rate
Define discount percentage (credit)
Interest cost is calculated by multiplying the______by the ______?
What is the basis for the discount rate in a DCF analysis? Describe how this rate mightbe estimated.
Decreases in the projected benefit obligation due to an increase in interest rate are called (enter 1, 2, 3, or 4 that represents the correct answer): Asset Gains Asset Losses Liability Gains Liability Losses
Define each of the following terms:e. Simple interest; discount interest; add-on interest