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Basic Question 2 of 2
On December 31, 2011, Staymore Inns' accumulated postretirement benefit obligation was $273 million. Retiree benefits of $27 million were paid at the end of 2011. Service cost for 2011 is $63 million.
B. $210 million.
C. $225 million.
Estimates and assumptions regarding future health care costs were revised in 2011, causing the actuary to revise downward the estimate of the APBO by $6 million. The actuary's discount rate is 8%. There were no unrecognized postretirement benefit costs at the end of 2011.
What was the accumulated postretirement benefit obligation at January 1, 2011?
A. $200 million.
B. $210 million.
C. $225 million.
User Contributed Comments 3
| User | Comment |
|---|---|
| jkc2007 | why do we subtract the actuary change of -$6mil? i thought any loss should be added to the equation? |
| thekapila | its not loss its a gain thats why u reduce it from beginning balance. |
| kodali | negative expense, since its revised downward |
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.