Payments of pensions and other benefits to retired workers are recognized as expense in the period payment is made.

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Payments of pensions and other benefits to retired workers are recognized as expenses during the years the employees render the services that entitle them to those benefits, not in the period the payments are made. This accounting treatment aligns with the accrual basis of accounting, where expenses are recognized when the obligation is incurred rather than when payment is made.

Payments of Pensions and Other Benefits to Retired Workers Are