An entity uses International Financial Reporting Standards to prepare its financial statements, but the defined benefit obligation has been calculated using assumptions that are different from IFRS. The financial statements of the entity also do not take into account unrecognized past service costs. How should the entity measure its net pension liability?
(a) The net present value of the defined benefit obligation less the fair value of the plan assets.
(b) The net present value of the defined benefit obligation less the fair value of plan assets less the unrecognized past service costs.
(c) The net present value of the defined benefit obligation less the fair value of the plan assets less the unrecognized past service costs. In addition, a review of the assumptions should be undertaken to remeasure the obligation.
(d) The value in the entity’s balance sheet will simply be used in the consolidated financial statements.