The pay-as-you-go method is an accounting approach for recognizing and funding other post-employment benefits (OPEB) by paying the benefits as they become due rather than accruing the costs over time. This method connects directly to the management of OPEB liabilities, emphasizing immediate payment obligations without creating large unfunded liabilities on the balance sheet. It is often used by organizations to manage cash flow and reduce future financial burdens related to retiree benefits.
congrats on reading the definition of pay-as-you-go method. now let's actually learn it.