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1. Which of these elements are taken into account when determining the discount rate to be used? (a) Market yields at the balance sheet date
1. Which of these elements are taken into account when determining the discount rate to be used? (a) Market yields at the balance sheet date on high-quality corporate bonds. (b) Investment or actuarial risk. (c) Specific risk associated with the entitys business. (d) Risk that future experiences may differ from actuarial assumptions. 2. An entity operates a defined benefit plan that pays employees an annual benefit based on their number of years of service. The annual payment does allow the employer to vary the final benefit. Over the last five years the entity has used this flexibility to increase employees pensions by the current growth in earnings per share. How will employees benefit be calculated if they retire in the current period? (a) It will be based on the existing plan rules with no additional award. (b) It will be based on the existing plan rules plus the current rate of growth of earnings per share. (c) It will be based on the plan rules plus the current rate of inflation. (d) It will be based on the plan rules plus the increase in earnings per share anticipated over the remaining working lives of the employees.
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