A minimum liability for pension expense is reported when:
A) the projected benefit obligation exceeds the fair value of pension plan assets.
B) the pension expense reported for the period is greater than the funding amount for the same period.
C) the accumulated benefit obligation exceeds the fair value of pension plan assets.
D) vested benefits exceed the fair value of pension plan assets.

Question

Quizplus · Accepted Answer

A minimum liability is reported when the accumulated benefit obligation (ABO) exceeds the fair value of pension plan assets, as it reflects the company's obligation to pay benefits that have been earned by employees up to the measurement date.

A Minimum Liability for Pension Expense Is Reported When