A governmental employer who makes contributions to pension plans for all employees:

Question

Quizplus · Accepted Answer

The correct answer is option D - all of the above.

A governmental employer who makes contributions to pension plans for all employees reports pension expenditures in a governmental fund in the amount actually contributed. This is because contributions made to pension plans are financial resources available to the governmental employer and, therefore, should be reported in a governmental fund.

In addition, the governmental employer also reports pension expenses in a proprietary fund reflecting changes to the net pension liability. This is because pension expenses represent the increase or decrease in the net pension liability of the governmental employer, which is a component of the net position or equity of the proprietary fund.

Finally, the governmental employer recognizes pension costs in the government-wide statements on the accrual basis of accounting. This is because the government-wide statements are prepared using the accrual basis of accounting and, therefore, recognize expenses when they are incurred, regardless of when the associated payments are made. Pension costs are recognized based on actuarial calculations that estimate the present value of the projected benefit payments to employees.

A Governmental Employer Who Makes Contributions to Pension Plans for All