contestada

In a defined benefit pension plan, gains and losses (either from changing assumptions regarding the PBO or from the return on assets being higher or lower than expected) are:a. Deferred and not immediately included in pension expense and Net incomeb. Included in pension expense and net incomec. Included in pension expense but not net incomed. Included in net income but not in pension expense

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Answer: a. Deferred and not immediately included in pension expense and Net income

Explanation:

Gains and losses (either from changing assumptions regarding the PBO or from the return on assets being higher or lower than expected) are not immediately included in pension expense or net income but rather are reported in the STATEMENT OF COMPREHENSIVE INCOME.

This is because they are UNUSUAL and can significantly affect the Net Income in such a way that it might be misinterpreted by the various users of the Financial statements.

The Gains or losses are this DEFERRED and AMORTIZED periodically.

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