The ending balance in the Pension Asset/Liability is the difference between the:projected benefit obligation and the fair value

Question

3 years ago

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The ending balance in the Pension Asset/Liability is the difference between the:projected benefit obligation and the fair value

of plan assets.accumulated benefit obligation and the fair value of plan assets.projected benefit obligation and the market-related asset value.accumulated benefit obligation and the market-related asset value.

Business

1 answer:

Annette [7] · Answer 1 · 2022-05-09T09:08:55+03:00

Answer:

Projected benefit obligation and the fair value of plan assets.

Explanation:

The projected benefit obligation is how much the company anticipates it will have to pay out to present and future retirees discounted to the statement date. if the funded status is positive, it creates a net pension asset on the balance sheet; if negative the plan is underfunded and a net liability is created.

The fair value of plan is asset straightforward, its the fair value of the funds invested to pay pension obligation. These are often invested in financial assets like stocks, bonds, and government securities.