Assume a government makes a change of assumption that results in an increase in its estimate of the net pension liability. This will be recorded in the government-wide statements as an increase in the net pension liability and an increase in deferred outflows of resources.

Question

Quizplus · Accepted Answer

When a government makes a change of assumption that results in an increase in its estimate of the net pension liability, this increase will be recorded as an increase in both the net pension liability and deferred outflows of resources in the government-wide statements. This is because the government has incurred obligations related to pension benefits that have not yet been paid and therefore represent a future use of resources (deferred outflows).

Assume a Government Makes a Change of Assumption That Results