Smurfit-Stone Container Corporation’s 2004 annual report shows the following information pertaining to its minimum pension liability (this is before SFAS No. 158; 000’s omitted):
Accumulated benefits obligation……………….. $3,336
Fair value of plan assets…………………….. 2,466
Underfunded status………………………………… 870
Unrecognized actuarial loss……………….. ………762
Unrecognized prior service cost……………….. 79
Net unrecognized costs……………………… 841
Net minimum liability ………………………………$ 29
Required:
How do you think Smurfit-Stone would justify their calculation of the minimum liability and do you agree with them?