Code: A = amortization of unrecognized prior service cost
B = interest cost
C = gain or loss to the extent recognized) D = service cost
E = expected return on plan assets
F = pension expense
Which equation would be correct for the calculation of pension expense?

Question

Quizplus · Accepted Answer

Pension expense (F) is calculated as the sum of service cost (D), interest cost (B), and amortization of unrecognized prior service cost (A), adjusted for the expected return on plan assets (E) and any recognized gains or losses (C). Therefore, the correct equation is F = D + B − E + A ± C.

Code: a = Amortization of Unrecognized Prior Service Cost