Question

Differences between the projected and actual returns on pension plan investments are deferred and recognized in expense over a five year period. T/F

Answer 1

Differences between the projected and actual returns on pension plan investments are deferred and recognized in expense over a five year period.

Step-by-step explanation:

True, differences between the projected and actual returns on pension plan investments are deferred and recognized in expense over a five year period. This is known as the amortization of actuarial gains and losses. When the actual returns are higher than projected, the gains are recognized as income over the five year period, and when the actual returns are lower than projected, the losses are recognized as expense over the same period.