Wahoo Company amended its defined-benefit plan and gave credit to employees for years of service provided before the date of amendment. Which of the following statements is true regarding the resulting cost?

Select one:

It will increase the projected benefit obligation and decrease other comprehensive income in the year of the amendment.

It will decrease both the accumulated benefit obligation and the projected benefit obligation.

The expense and the liability should be recognized at the time of the plan change.

The expense should be recognized immediately, but the liability may be deferred until a reasonable basis for its determination has been identified.