Question

Critics of SFAS No. 87 argue that its requirements result in reporting pension expense that is volatile. One of the factors causing volatility is changing the discount rate used to calculate service cost and the projected benefit obligation.
The FASB requires use of the “settlement rate” to discount projected benefits.

Required
a. What is the settlement rate?
b. Explain why the FASB chose the settlement rate to discount projected benefits.
c. What alternative rate, or rates, might be preferred by opponents of the settlement rate? Why?
d. Why might companies object to increased volatility of pensi9on expense? Discuss.



$1.99
Sales4
Views119
Comments0
  • CreatedAugust 05, 2013
  • Files Included
Post your question
5000