Final answer:
An employer does not have to report a liability on its balance sheet in a defined-benefit plan because the liabilities are the obligation of the plan, not the employer.
Step-by-step explanation:
An employer does not have to report a liability on its balance sheet in a defined-benefit plan. This is because the liabilities in a defined-benefit plan are not considered to be the employer's obligation. Instead, they are considered to be the obligation of the plan itself.
In a defined-benefit plan, the employer promises to pay a specific benefit amount to employees upon retirement. However, the employer does not have to report this obligation as a liability on its balance sheet because the plan itself is responsible for funding and paying the benefits.