Question

A pension fund gain or loss that is caused by a plan closing should be

a. recognized immediately as a gain or loss on the plant closing
b. spread over the current year and future years
c. charged or credited to the current pension expense
d. recognized as a prior period adjustment

Answer 1

A pension fund gain or loss that results from a plan closing should be recognized immediately as a gain or loss on the plant closing.

Step-by-step explanation:

A pension fund gain or loss that is caused by a plan closing should be

1. recognized immediately as a gain or loss on the plant closing
2. spread over the current year and future years
3. charged or credited to the current pension expense
4. recognized as a prior period adjustment

When a pension plan closes, any gain or loss related to the closure should be recognized immediately as a gain or loss on the plant closing. This means the impact of the closure on the pension fund's financial position should be recorded in the financial statements of the plan sponsor. It should not be spread over multiple years or accounted for as a prior period adjustment.