Final answer:
Immediate loss recognition in pension accounting typically applies to abnormal and infrequent events such as a plant closing. Regular asset or liability losses are recognized over time instead of immediately, as per the general standards of financial reporting for pensions.
Step-by-step explanation:
The question relates to the recognition of losses in the context of pension accounting under financial reporting standards. When considering the immediate recognition of asset losses and liability losses in pension accounting, the general rule is not to recognize them immediately unless they arise from a single, infrequent, or unusual event. Immediate recognition means that these losses are directly included in the income statement for the period in which they occur.Among the options given, losses that arise from a single occurrence, such as a plant closing (option d), should be recognized immediately. This is because such an event is typically considered to be abnormal and infrequent, making immediate recognition appropriate.
However, under certain pension accounting rules like those outlined by the Financial Accounting Standards Board (FASB) in the United States, gains and losses on plan assets and changes in the projected benefit obligation are generally recognized in other comprehensive income and amortized to net income over time, rather than being recognized immediately.The losses that should be recognized immediately are asset losses and liability losses.Asset losses occur when the value of an asset decreases, such as a decline in the market value of investments or a decrease in the value of property, plant, and equipment. Liability losses, on the other hand, occur when there is an increase in the obligation to pay future benefits, such as an increase in the projected benefit obligation for pension plans.When these losses occur, they should be recognized immediately on the financial statements because they represent a decrease in the company's financial position and potential future obligations.