Final answer:
The question is about the requirement for companies to disclose annual changes in projected benefit obligation and fair value of pension plan assets, promoting transparency and penalizing underfunded plans.
Step-by-step explanation:
The student's question pertains to the disclosure requirements for companies that have pension plans. It's crucial for these companies to disclose a reconciliation of how the projected benefit obligation (PBO) and the fair value of plan assets change over the course of a year.
This is typically found within the financial statements or in the accompanying notes. Such disclosures are in line with regulations that aim to penalize firms for underfunding their pension plans and to foster transparency by providing employees with more information about their pension accounts.