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Basic Question 7 of 17
Information regarding the defined-benefit pension plan of Pauline Products included the following for 2011 ($ in millions):
Accrued pension cost: 2.
December 31:
Projected benefit obligation (PBO): 85.
Accumulated benefit obligation (ABO): 75.
Plan assets: 50.
Pension expense: 8.
January 1:
Accrued pension cost: 2.
December 31:
Projected benefit obligation (PBO): 85.
Accumulated benefit obligation (ABO): 75.
Plan assets: 50.
Pension expense: 8.
No contributions were made to the pension plan assets during 2011. At December 31, 2011, what amount should Hall record as additional pension liability?
User Contributed Comments 3
| User | Comment |
|---|---|
| danlan2 | end of year pension cost=begin of year pension cost+pension expense |
| HenryQ | Good question. Should always consider prepaid/accrued items. |
| quanttrader | additional pension liability = minimum liability (ABO-assets) -accrued liability |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
explain and calculate how adjusting for items of pension and other post-employment benefits that are reported in the notes to the financial statements affects financial statements and ratios;
interpret pension plan note disclosures including cash flow related information;
CFA® 2025 Level II Curriculum, Volume 2, Module 11.