Which of the following is not a step in reporting a pension liability?
A) The pension benefit payments that will ultimately be required are estimated by an actuary.
B) The portion of those payments that are attributable to past periods of employee service is calculated.
C) The present value of amounts attributable to past periods of employee service is determined in order to arrive at the government's obligation at the present time.
D) Excess liability balance is shown in the government-wide financial statements as a net pension asset.
E) Excess liability balance is shown in the government-wide financial statements as a net pension liability.

Question

Quizplus · Accepted Answer

A net pension asset is not a liability; it represents an overfunded pension plan, whereas a net pension liability represents an underfunded plan. Thus, showing an excess liability balance as a net pension asset is incorrect.

Which of the Following Is Not a Step in Reporting