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Q14Q.

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Intermediate Accounting (Kieso)
Found in: Page 1161

Short Answer

What are “liability gains and losses,” and how are they accounted for?

Pension liability is an obligation for an organization because the total pension amount has to be paid to its employees and is reported under the liability section of the organization's balance sheet.

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Step by Step Solution

Liability gains and losses

Liability gains and losses are those amounts an organization receives due to the changes in defined pension plans. These arise due to an uncertain increase or decrease in the pension obligation of an organization.

Liability gains and losses are accounted for

Both are merged with the organization's total unrecognized net gain or net loss and are represented under the memo record column of the organization's pension worksheet yearly.

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