Assume a government makes a change of assumption that results in an increase in its estimate of the net pension liability. The resulting change in the net pension liability will be recorded as pension expense in the period of the change.

Question

Quizplus · Accepted Answer

Changes in the estimate of the net pension liability are recognized immediately in the pension expense only to the extent they affect the current service cost and the interest on the pension liability. Other changes, such as plan amendments or changes in actuarial assumptions, are recognized in other comprehensive income and amortized over time into pension expense.

Assume a Government Makes a Change of Assumption That Results