Stanley Bostwick, CFA, is a business services industry analyst with Mortonworld Financial. Currently, his attention is f

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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.Which of the following best describes the effects of a decrease in the rate of compensation growth during 2009 all else equal? Global Oilfield's:

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A. service cost is lower and the accumulated benefit obligation is higher.
B. pension expense is lower and the plan assets are higher.
C. net income is higher and the funded status is higher.