The major difference between accounting for pensions and the accounting for other postretirement benefits is that firms:
A) do not need to report an excess of the accumulated benefits obligations over assets in a postretirement benefits fund as a liability on the balance sheet.
B) do not need to disclose any estimates used in calculating projected benefits.
C) postretirement benefits are normally not material for most companies and do not need to be disclosed.
D) do not need to set aside funds for future postretirement benefits as they do for pension benefits.

Question

Quizplus · Accepted Answer

For pensions, if the accumulated benefits obligations exceed the pension plan assets, a liability must be reported on the balance sheet. This is not required for other postretirement benefits.

Answer: D
 For pensions, the firm is required to set aside funds to meet future pension obligations. This is not required for other postretirement benefits.

The Major Difference Between Accounting for Pensions and the Accounting