Question

"A company has a defined benefit pension plan for its employees. On December 31, year one, the accumulated benefit obligation is $45,900, the projected benefit obligation is $68,100, and the fair value of the plan assets is $62,000. What amount, if any, related to the defined benefit plan should be recognized in the balance sheet at December 31, year one

Answer 1

$6,100

Step-by-step explanation:

Data given in the question

Accumulated benefit obligation = $45,900

Projected benefit obligation = $68,100

Fair value of the plan assets = $62,000

So, by considering the above information, the benefit plan recognized is

= Projected benefit obligation - fair value of the plan assets

= $68,100 - $62,000

= $6,100

Hence, the accumulated benefit obligation is ignored