Hello: Can we please review the corridor rule? I can’t remember it now… Thanks!
If the difference between actual and expected returns for pensions exceeds 10% than the difference must be amortized.
is it likely we will see a full item set on pensions, or will it come as part of vignette with other questions like compensation expense or maybe adjusting financial statements
aarguello Wrote: ------------------------------------------------------- > If the difference between actual and expected > returns for pensions exceeds 10% than the > difference must be amortized. I forgot this arcane rule myself and Im an accountant, what is this corridor again?
amortization is required if the accumulated gain/loss exceeds 10% of the greater of PBO or Plan assets at the beginning of the year. This 10% is the corridor.
“When a firm amends or adopts its pension plan, the PBO is immediately increased. Instead of expensing the cost immediately, it’s reported in other comprehensive income and amortized as deferred past service cost.” What is the difference then between plan amendments that go toward the “Plan Amendments” portion of the Pension Expense calculation, and the plan amendments that go on “Amortized past service cost?”
Hey guys, Is there any example illustrating the Corridor within CFAI book? If yes, should have a look at it tonight;) Thanks! M.
malek_bg Wrote: ------------------------------------------------------- > Hey guys, > > Is there any example illustrating the Corridor > within CFAI book? If yes, should have a look at it > tonight;) > > Thanks! > M. I don’t think there were any examaples, but it was definitely talked about briefly. Best, TheChad