Which of the following components should be included in the calculation of net pension cost recognized for a period by an employer sponsoring a defined benefit pension plan? Actual Return Amortization of
On Plan Assets, Unrecognized Prior Interest
If Any Service cost,If Any Cost

Question

Quizplus · Accepted Answer

All three components should be included in the calculation of net pension cost recognized for a period. 
- Actual return on plan assets is the return earned on the plan’s investments during the period and is included in the calculation of net periodic pension cost as part of the expected return on plan assets. It represents the reduction in the employers’ pension liability resulting from investment earnings on plan assets.
- Amortization of unrecognized prior service cost, which is the cost of benefits granted to employees retroactively for service already rendered, is included in the calculation of net pension cost to reflect a portion of the cost in the current period. 
- Amortization of the unrecognized net gain or loss (the difference between the actual return on plan assets and the expected return on plan assets, as well as other changes in assumptions or plan terms) is included over a period of time to smooth out the impact on net pension cost.

Which of the Following Components Should Be Included in the Calculation