Can someone help me understand why the Benefits paid out are somehow not reflected on the Pension Expense. I am thinking since benefits paid reflect the reduction in PBO, it should somehow reflect in the Pension expense as well. Yes/No/Maybe ???
The expense is already accounted for with the increase in service + interest cost, as well as other factors each year. If you were to expense again when the benefits are actually paid it would double count it. I think.
because paying something is a cash flow - in this case outflow cash flow statement and income statement are different
I meant reduce the Pension expense by the Benefits paid. Won’t that be logical since your PBO is going down by that amount.
when I find something confusing, I will refer to the definition. pension expense= cost +/- amortization. so , nothing related to the benefit paid out.