In computing the service cost component of pension expense, the FASB concluded that
a. the accumulated benefit obligation provides a more realistic measure of the pension obligation on a going concern basis.
b. a company should employ an actuarial funding method to report pension expense that best reflects the cost of benefits to employees.
c. the projected benefit obligation using future compensation levels provides a realistic measure of present pension obligation and expense.
d. All of these answers are correct.
Answer: the projected benefit obligation using future compensation levels provides a realistic measure of present pension obligation and expense
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