Which of the following statements regarding the financial statements of a defined benefit pension plan is CORRECT?

Answer options:

The plan must report a Statement of Net Assets Available for Benefits and a Statement of Changes in Net Assets Available for Benefits.

The plan must report a Statement of Comprehensive Income.

The plan must report the Net Pension Liability of the sponsor on the face of its financial statements.

Investments are reported at historical cost.

How to approach this question

Recall the specific statements for Employee Benefit Plans (ASC 960). Net Assets Available and Changes in Net Assets.

Full Answer

A.The plan must report a Statement of Net Assets Available for Benefits and a Statement of Changes in Net Assets Available for Benefits.✓ Correct

Defined benefit plans report: 1. Statement of Net Assets Available for Benefits. 2. Statement of Changes in Net Assets Available for Benefits. 3. Accumulated Plan Benefits information (often in notes).

Common mistakes

Confusing Plan reporting with Sponsor reporting.

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