Harms Inc. reported in its 2006 annual report the following information:
$\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Plan Status: December 31, } 2006}$

$\begin{array} { l r } \text { Accumulated Benefit Obligation (ABO) } & \$ 90 \text { million } \ \text { Projected Benefit Obligation (PBO) } & 95 \text { million } \ \text { Plan Assets (at fair value) } & 80 \text { million } \ \text { Unrecognized transition asset } & 11 \text { million } \ \text { Unrecognized actuarial losses } & 1 \text { million }\
\
\text { Assumptions: }\
\text {Discount rate}&8\%\
\text {Return on assets}&9\%\
\text {Compensation growth}&5\% \end{array}$

-Funded status at the end of 2006 was:

Question

Harms Inc. reported in its 2006 annual report the following information:
  $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Plan Status: December 31, } 2006}$

$\begin{array} { l r } \text { Accumulated Benefit Obligation (ABO) } & \$ 90 \text { million } \ \text { Projected Benefit Obligation (PBO) } & 95 \text { million } \ \text { Plan Assets (at fair value) } & 80 \text { million } \ \text { Unrecognized transition asset } & 11 \text { million } \ \text { Unrecognized actuarial losses } & 1 \text { million }\
\
\text { Assumptions: }\
 \text {Discount rate}&8\%\
 \text {Return on assets}&9\%\
 \text {Compensation growth}&5\% \end{array}$

-Funded status at the end of 2006 was:

Quizplus · Accepted Answer

The funded status is the difference between the plan assets and the PBO. In this case, the plan assets are $80 million and the PBO is $95 million, so the funded status is $80 million - $95 million = -$15 million. However, since the funded status cannot be negative, the correct answer is $0 million.

Harms Inc Reported in Its 2006 Annual Report the Following Information