Final answer:
The false statement regarding pension accounting under IFRS and U.S. GAAP is that prior service cost is amortized over the expected service lives of employees under U.S. GAAP only. Both standards treat prior service cost differently, but U.S. GAAP does not have an exclusive claim to its amortization into income.
Step-by-step explanation:
The main answer to the student's question is that option (c) 'Prior service cost is amortized into income over the expected service lives of employees under U.S. GAAP only.' is the false statement regarding the accounting for pensions under IFRS and U.S. GAAP. Both IFRS and U.S. GAAP have different approaches to the recognition and measurement of pension costs.Prior service cost is recognized in other comprehensive income (OCI) and amortized into income under U.S. GAAP. However, under IFRS, past service cost is recognized immediately in profit or loss for the period in which the plan amendment or curtailment occurs. Additionally, U.S. GAAP requires that companies amortize actuarial gains and losses over the expected service lives of the employees, while IFRS allows recognition of actuarial gains and losses in OCI, with no subsequent recycling to profit or loss (although immediate recognition in profit or loss is also allowed).In conclusion, the false statement is related to the exclusive amortization of prior service cost under U.S. GAAP, when in reality, both IFRS and U.S. GAAP recognize such costs in different ways.