QUESTION 4 GE pays health insurance to employees who retire early. How are these

Question

QUESTION 4 GE pays health insurance to employees who retire early. How are these obligations accounted for according to SFAS No. 106 (OPEB)?

a. Other post-employment benefits obligations that are liabilities & the annual expense reported on the income statement as part of income from continuing operations

b. Extraordinary item

c. Other post-employment benefits obligations that are reported as other comprehensive income

d. Other post-employment benefits obligations that are off-balance-sheet, but reported as nonrecurring items on the income statement

Explanation / Answer

Obligation to pay helth insurance to employees who reire early shall be recorded as expense and liability for the future obligation. thus it should be

a. Other Post- employment benefits obligations that are liabilities and the annual expense reported on the income statement as part of income from continuing operations.

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