Question

ACE has a defined benefit pension plan. ACE is preparing the December 31, 2014 financial statement disclosures related to the plan assets. It should disclose which of the following?

I. Expected Return on Plan Assets
II. Actual Return on Plan Assets
A. I
B. II
C. both I and II
D. neither I nor II

Answer 1

ACE should disclose both the expected return on plan assets and the actual return on plan assets.

Step-by-step explanation:

ACE, as a company with a defined benefit pension plan, needs to disclose certain information related to the plan assets on its financial statements. Specifically, ACE should disclose both the expected return on plan assets and the actual return on plan assets for the year ending December 31, 2014.

The expected return on plan assets represents the estimated return that ACE anticipates earning on the investments held in the pension plan. This is based on various factors such as the asset allocation and prevailing market conditions.

The actual return on plan assets is the realized return earned on the plan assets during the year. It takes into account the actual performance of the investments and any gains or losses incurred.