Which of the following is/are not true?
A)An employer must recognize changes in the funded status of a defined benefit retirement plan on its balance sheet each period.
B)U.S.GAAP and IFRS do not require the employer to recognize changes in the funded status of a defined benefit retirement plan immediately in net income.
C)Changes in the net funded status of a defined benefit retirement plan because investment performance differs from expectations, or because of changes in actuarial assumptions, or in the retirement benefit formula, initially affect other comprehensive income.
D)Firms amortize the amounts in the contingency reserve for underfunded/overfunded retirement plans over the expected period of benefit as an adjustment to retirement plan cost.
E)all of the above

Question

Quizplus · Accepted Answer

Explanation: Choices A, B, and C are true statements regarding the accounting for defined benefit retirement plans. Under both U.S. GAAP and IFRS, employers must recognize changes in the funded status of a defined benefit plan on their balance sheet each period. These standards also do not require immediate recognition of these changes in net income; instead, they are initially recognized in other comprehensive income. However, choice D is not true because there is no specific "contingency reserve" mentioned in the accounting standards for underfunded/overfunded retirement plans, and the process of amortization of amounts related to pension plans does not work as described in the option.

Which of the Following Is/are Not True