The amount of pension expenditures that should be recognized in the government-wide financial statements during the current year is
A)The amount paid.
B)The amount paid plus the amount that will be paid with available expendable financial resources.
C)The amount paid so long as it does not exceed the actuarially determined amount.
D)The actuarially determined amount.

Question

Quizplus · Accepted Answer

The amount of pension expenditures that should be recognized in the government-wide financial statements during the current year is the actuarially determined amount. This is because governments must recognize the full cost of their pension obligations in the year they are earned by employees rather than when the payments are made. The actuarially determined amount takes into account the cost of current benefits earned by employees as well as an allocation of the future unfunded liability.

The Amount of Pension Expenditures That Should Be Recognized in the Government-Wide