The formula used to calculate pension expense must necessarily be the same as the formula used to calculate funding to the plan.

Question

Quizplus · Accepted Answer

The formula used to calculate pension expense (which reflects the cost of the pension benefit earned by employees in the current period and other factors under accounting standards) can be different from the formula used to calculate funding to the plan (which is determined by actuarial assumptions, funding requirements, and regulatory rules).

The Formula Used to Calculate Pension Expense Must Necessarily Be