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Statement 87 governs the ways in which an employer accounts for and reports the costs of pension benefits offered to its employees. It requires that, for accounting purposes, employers use a cost method known as the projected unit credit method in order to establish the net periodic cost of pension benefits offered to employees. Statement 87 further requires employers to recognize a liability if the net periodic cost is higher than employer contributions to the plan and an asset if the net periodic cost is lower.
Glossary