A government sponsoring a defined benefit pension plan changes an assumption underlying the measurement of the net pension liability. Assuming the estimated of this liability increases, how will this be reflected in the government-wide statements?
A) As an increase in the net pension liability and an expense.
B) As an increase in the net pension liability and a deferred outflow of resources.
C) As an increase in the net pension liability and an intangible asset.
D) None of the above, changes in estimated are not recorded.

Question

Quizplus · Accepted Answer

If a government sponsoring a defined benefit pension plan changes an assumption underlying the measurement of the net pension liability would result in an increase in the net pension liability and a deferred outflow of resources.

A Government Sponsoring a Defined Benefit Pension Plan Changes an Assumption