Accounting Treatment of Post-Employment Benefits

ABC Corp. offers a defined benefit pension plan to its employees, where retirement benefits are calculated based on the employee's salary and years of service. The company has an obligation to fund this plan and report the associated expenses in its financial statements. Recently, there has been a lot of discussion around the accounting treatment of employee post-employment benefits.

Which of the following statements regarding the accounting treatment of post-employment benefits in the financial statements of ABC Corp. is correct?