How does U.S. GAAP require the prior service cost related to retirees to be recognized?
A) Amortize over the average remaining working lives of active employees
B) Recognize immediately
C) Don't recognize at all
D) Amortize over remaining expected life of the retirees

Question

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U.S. GAAP requires that the prior service cost related to retirees be recognized by amortizing it over the remaining expected life of the retirees. This is done in order to match the cost with the period in which the retirees provide service to the company.

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