Accounting for Defined Benefit Pension Plans

A company operates a defined benefit pension plan for its employees. Under this plan, the company is expected to make annual contributions to fund the plan, which will provide employees with a specified retirement benefit based on their salary history and years of service. Given the complexities of accounting for post-employment benefits in accordance with IFRS, consider the following statements:

Which of the following statements correctly explains the accounting treatment of the defined benefit pension plan?