Under what condition can the actuarially determined annual required contributions be considered an expense?

The consideration of actuarially determined annual required contributions as an expense primarily relates to single-employer defined benefit plans. In these plans, the contributions required to fund pension benefits are based on various actuarial assumptions and calculations intended to meet the long-term pension obligations.

When there is a single-employer defined benefit plan, these actuarial contributions are reported as an expense in the financial statements because they represent the costs associated with providing promised benefits to employees. This aligns with the accounting principles that require expenses to be recognized when they are incurred, reflecting the organization’s obligations under the plan.

Other scenarios may influence how contributions are recognized but do not specifically address the condition under which these contributions can be treated as expenses. For example, exceeding revenue, considerations of the fiscal year, and budget approvals may impact cash flow and financial reporting but do not fundamentally alter the treatment of contributions as expenses in the context of defined benefit plans.