Professor Adams' Lecture Materials - ACC202-M07-LO6

Professor Adams' Lecture Materials

LO7-06: Describe how pension expense is a composite of periodic changes that occur in both the pension obligation and the plan assets.

1. What are the components of pension expense?

Service cost
Interest cost
Return on plan assets
Amortization of prior service costs
Amortization of a net loss or a net gain

✏️ Illustration LO7-06-01: Components of Periodic Pension

Source: Spiceland et al. 2023, p. 991

A312.A01.Module7Pensions

Solution to Example Problem LO7-06-01

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