Defined Benefit Pension Expense Components

Very Easy Employee Compensation Post-employment Benefits

ABC Corporation provides a defined benefit pension plan for its employees as part of its post-employment benefits. As of the latest financial reporting period, the company reported its pension obligation and the fair value of the plan assets. Which of the following statements correctly describes the components that are typically included in the measurement of ABC Corporation's defined benefit pension expense?

The pension expense includes only the interest cost on the benefit obligation.

The pension expense includes service cost, interest cost, and expected return on plan assets.

The pension expense includes only the service cost and gains or losses on plan assets.

Hint

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