I am solving Finquiz itemsets for pensions and i’ve problem with one question. The Finquiz id is 15594. Is there someone kind enough to help me with this question. The question asks about pension liability recognized under GAAP.
Pension liability under GAAP is PBO or funded status? I chose PBO but FINQUIZ said it is funded status.
Please help. I’ll be extremely grateful.
Pension liability on the balance sheet under GAAP is the funded status (which is more conservative than IFRS which allows the smoothing effects related to gradual recognition of actuarial gains/losses and past service costs not yet recognized). Theoretically the only way PBO would be the right answer is if you had no pension assets against which to set off the PBO. You have to net the PBO against the assets to get the liability.
Thank you very much … So that was under GAAP. Under IFRS?
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