Pension Accounting Terminology SFAS No. 87 , “Employers Accounting for Pensions,” requires an understanding of certain terms. Required:

a. Discuss the following components of annual pension cost:

i. Service cost

ii. Interest cost

iii. Actual return on plan assets

iv. Amortization of unrecognized prior service cost

v. Amortization of the transition amount

b. Discuss the composition and treatment of the minimum liability provision.