U.S.GAAP and IFRS require firms to recognize the cost of pension plans as an expense during the years as the employees receive the retirement benefits.

Question

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Both U.S. GAAP and IFRS require firms to recognize the cost of pension plans as an expense during the years the employees render the services that will entitle them to future benefits, not when they receive the retirement benefits.

USGAAP and IFRS Require Firms to Recognize the Cost of Pension