The difference between the actual and expected return on plan assets during year two is a component of pension expense for year two.

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Quizplus · Accepted Answer

The difference between the actual and expected return on plan assets affects the amount of pension expense indirectly through the actuarial gains and losses, but it is not a direct component of the pension expense calculation for the year. Pension expense components typically include service cost, interest cost, expected return on plan assets, and amortizations of prior service cost and actuarial gains/losses.

The Difference Between the Actual and Expected Return on Plan