Defined Benefit Plans Accounting Treatment

XYZ Corporation sponsors a defined benefit pension plan for its employees, which promises to provide a specified retirement benefit based on the employee's salary and years of service. The plan is funded through company contributions and investment income. As part of financial reporting, XYZ Corporation needs to account for its pension obligations and make certain disclosures in its financial statements.

In the context of defined benefit plans, which of the following statements accurately reflects the nature of the accounting treatment for these plans?