FASB ASC 715 requires prior service cost from plan amendments to be initially recognized in other comprehensive income and then amortized to pension expense over the average remaining service period of active employees expected to receive benefits. The $600,000 prior service cost is recorded in OCI at the amendment date, and $60,000 ($600,000 ÷ 10 years) is amortized to pension expense in 20X5. Answer A incorrectly requires immediate expensing, which violates the matching principle underlying deferred recognition. Answer C incorrectly suggests reducing plan assets, when prior service cost affects only the PBO and equity accounts. Answer D incorrectly defers all recognition, when ASC 715 requires immediate OCI recognition with systematic amortization. The professional framework recognizes that plan amendments create an obligation for past service that should be matched with future periods when employees provide the remaining service that vests their enhanced benefits.

FASB ASC 715 requires entities to recognize the funded status of defined benefit pension plans on the statement of financial position, calculated as the difference between the projected benefit obligation (PBO) and fair value of plan assets. At December 31, 20X5, the funded status is: PBO $52.0 million - plan assets $47.5 million = underfunded by $4.5 million, requiring recognition of a pension liability. The prior year's funded status ($49.0 - $46.0 = $3.0 million underfunded) is already reflected in the opening balance sheet, so the focus is on properly stating the current year position. Answer A is incorrect because an underfunded plan creates a liability, not an asset. Answer C incorrectly calculates only the change in funded status rather than the total underfunded amount. Answer D is incorrect because ASC 715 explicitly requires balance sheet recognition of the full funded status. Professional judgment requires comparing PBO to plan assets at each reporting date and recognizing the net position as either an asset (overfunded) or liability (underfunded).

FASB ASC 715 requires immediate recognition of curtailment gains or losses when a significant reduction in future service occurs, along with acceleration of any unrecognized prior service cost attributable to years of service no longer expected to be rendered. The $1,100,000 reduction in PBO creates a curtailment gain recognized in earnings, and the $700,000 unrecognized prior service cost related to eliminated future service must be accelerated from AOCI to earnings as well. Answer A incorrectly characterizes the PBO reduction as a loss and fails to address prior service cost acceleration. Answer B incorrectly defers the gain recognition to OCI when curtailments require immediate earnings impact. Answer D incorrectly equates curtailments with settlements, which are distinct events under ASC 715. The professional framework recognizes that curtailments fundamentally change the economics of the plan, requiring immediate recognition of both the direct gain/loss and any stranded deferred items that can no longer be matched with future service.

FASB ASC 715 requires the statement of financial position to reflect the funded status of defined benefit plans, calculated as fair value of plan assets minus the projected benefit obligation (PBO), regardless of unrecognized items in AOCI. The net pension liability is: PBO $34,000,000 - plan assets $30,000,000 = $4,000,000 underfunded. The unrecognized prior service cost ($1,200,000) and actuarial loss ($2,500,000) remain in AOCI and do not affect the balance sheet liability amount. Answer A incorrectly adds the AOCI items to the funded status. Answer C incorrectly uses only part of the underfunded amount. Answer D incorrectly suggests AOCI items offset the balance sheet presentation. The critical principle is that ASC 715 requires full funded status recognition on the balance sheet, with unrecognized items affecting only equity through AOCI until they are amortized to expense.

For defined contribution plans under FASB ASC 715, the employer's obligation is limited to the contribution required for each period, with expense recognition based on the contribution formula applied to covered compensation, not cash payments. The required contribution is: $20,000,000 × 6% = $1,200,000, which represents the full expense for 2025 regardless of payment timing. The $300,000 unpaid portion ($1,200,000 - $900,000 paid) is accrued as a liability at year-end. Answer A incorrectly limits expense to cash paid, violating accrual accounting. Answer C incorrectly suggests recording the accrual in AOCI, when defined contribution obligations are straightforward liabilities. Answer D incorrectly denies any expense recognition for defined contribution plans. The key principle is that defined contribution accounting is simpler than defined benefit accounting—expense equals the period's required contribution with no actuarial complexities, and any unpaid amounts are current liabilities.

Under FASB ASC 715, when plan assets exceed the projected benefit obligation (PBO), the overfunded amount is recognized as a net pension asset on the statement of financial position. The pension asset is: plan assets $44,000,000 - PBO $40,000,000 = $4,000,000 overfunded. This represents the employer's net economic position in the plan, subject to considerations about asset recoverability through refunds or contribution holidays. Answer A incorrectly suggests always reporting a liability regardless of funding status. Answer C incorrectly requires gross presentation when ASC 715 mandates net presentation of funded status. Answer D incorrectly denies asset recognition for overfunded plans, when ASC 715 requires symmetrical treatment of overfunded and underfunded positions. The professional framework recognizes that overfunded plans represent economic resources controlled by the employer, though subject to regulatory restrictions and potential asset ceiling tests under certain circumstances.

Under FASB ASC 715, net periodic postretirement benefit cost for plans other than pensions follows the same calculation framework as pension plans, including service cost, interest cost, and expected return on plan assets (if funded). The calculation is: service cost $500,000 + interest cost $400,000 - expected return on plan assets $350,000 = $550,000. Benefits paid and employer contributions affect the APBO and plan assets but do not directly impact periodic expense recognition. Answer B incorrectly adds the expected return instead of subtracting it. Answer C omits the expected return entirely. Answer D incorrectly calculates a net of various items that don't belong in expense. The key principle is that postretirement benefit accounting mirrors pension accounting in expense recognition, with the main difference being that most postretirement plans are unfunded or partially funded compared to pension plans.

Under FASB ASC 715, when unrecognized actuarial losses in accumulated other comprehensive income (AOCI) are amortized as part of net periodic pension cost, the amortization increases pension expense and simultaneously reduces the unrecognized loss balance in AOCI through a reclassification adjustment. The $140,000 amortization increases pension expense (debit) and decreases AOCI (credit), effectively moving the loss from equity to the income statement. Answer B incorrectly suggests decreasing pension expense, which would occur only with gain amortization. Answer C incorrectly shows both accounts increasing, violating the reclassification principle. Answer D incorrectly states that actuarial items bypass AOCI, when ASC 715 specifically requires initial recognition in other comprehensive income. The key framework is that amortization of losses increases expense while amortization of gains decreases expense, with corresponding opposite effects on AOCI to maintain the articulation between comprehensive income components.

Under FASB ASC 715, actuarial gains and losses arising during the period are initially recognized in other comprehensive income and accumulated in AOCI, not immediately recognized in net income. The $900,000 actuarial gain increases other comprehensive income (credit) and reduces the net actuarial loss position in AOCI, improving the entity's equity position without affecting current period pension expense. Answer A incorrectly requires immediate income recognition, which would occur only through corridor amortization of accumulated amounts. Answer C incorrectly suggests a direct balance sheet adjustment to plan assets, when actuarial gains affect only the PBO measurement. Answer D incorrectly proposes off-balance sheet treatment, violating the comprehensive recognition requirements. The framework for actuarial items follows a two-step process: initial OCI recognition preserves income statement stability, followed by systematic amortization when accumulated amounts exceed the corridor threshold.