Under GAAP, companies that have "defined benefit" pension plans for their employees are required to record expenses for these plans while the employees are working, and are not allowed to wait to record the expenses until the employees retire.

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This is true under GAAP (Generally Accepted Accounting Principles). Companies are required to record the expenses for defined benefit pension plans while the employees are working, through what is called the "service cost component" of the net periodic pension cost. Waiting to record the expenses until the employees retire could significantly understate the retirement costs and skew the company's financial statements.

Under GAAP, Companies That Have "Defined Benefit" Pension Plans for Their