annual unit credit earned in the current period

问题如下：

Following his calculation of the pension plan liability, Paul asks Loris two questions about the discount rate that is used:

1. Exhibit 1 doesn’t mention how you determined the discount rate that was used. What rate is the most appropriate rate to use?

2. What would be the effect of using a higher discount rate on various components of the company’s pension plan obligation?

(2) The least appropriate answer to Paul’s second question is that the:

选项：

opening obligation would decrease.

current service cost would increase.

interest cost may either increase or decrease.

解释：

B is correct. The current service cost is the present value of the annual unit credit earned in the current period. A higher discount rate means that the present value of the future benefits earned in retirement will be lower and hence the annual unit credit will be lower. Therefore, the current service cost will decrease not increase.