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Which of the following statements about the expected postretirement benefit obligation (EPBO) is not correct? a. The EPBO is recorded in the accounts. b. The EPBO is used in measuring periodic expense. c. The EPBO is an actuarial present value. d. The EPBO is an actuarial present value and is used in measuring periodic expense.

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Answer:

The correct answer is letter "A": The EPBO is recorded in the accounts.

Explanation:

The Expected Postretirement Obligation (EPBO) is an estimation of the value of the benefits employees will receive upon retirement including all the time workers remained in the firm. This is merely a calculation and is not subject to any type of transaction to be recorded in the company's books. The EPBO is not related to workers' pensions.

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