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Chapter 4 — Foreign Currency Transactions

4.19 Defined Benefit Pension Plans

4.19 Defined Benefit Pension Plans

In some cases, the benefits payable to plan participants under defined benefit pension or other postretirement plans may be denominated in a currency other than an entity’s functional currency. For example, a foreign entity whose functional currency is the reporting currency of its parent may sponsor a defined benefit plan with benefit payments payable in the local currency. In these instances, it is also common for the plan assets to be denominated in the foreign currency.