Stanley Bostwick, CFA, is a business services industry analyst with Mortonworld Financial. Currently, his attention is focused on the 2008 financial statements ofGlobal Oilfield Supply, particularly the footnote disclosures related to the company's employee benefit plans. Bostwick would like to adjust the financial statements to reflect the actual economic status of the pension plans and analyze the effect on the reported results of changes in assumptions the company used to estimate the projected benefit obligation (PBO) and net pension cost. But first, Bostwick must familiarize himself with the differences in the accounting for defined contribution and defined benefit pension plans.Global Oilfield's financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). Excerpts from the company's annual report are shown in the following exhibits.If Global Oilfield's retirement plan is a defined contribution arrangement, which of the following statements would be the most correct?
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A. Pension expense and the cash funding amount would be the same.
B. The potential gains or losses from the assets contributed to the plan are borne by the firm.
C. The firm would report the difference in the accumulated benefit obligation and the pension assets on the balance sheet.
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