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How is the funded status of a pension plan recorded in the financial statements?

Funded status refers to if the pension plan is overfunded or underfunded. If the pension plan is overfunded, then the difference is recorded in the non-current asset section of the balance sheet.

If the plan is underfunded, then the difference is recorded in the liability section of the financial statements. Classification between current and non-current liability is based on what amount of the pension is expected to be due in the next 12 months.

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