How is the portion of unrecognized actuarial losses determined in OCI and NI?
Let’s use the example on page 181 in the FRA book
Plan assets = $4,850,000 PBO = $5,000,000 Actuarial losses = $610,000 Corridor = $500,000 (10% of PBO) Service life of employees = 10 years
The first time I read it, I thought that the only $11,000 goes the NI and the rest ($599,000, calculated as $610,000 - $11,000) goes to OCI.
But is it $500,000 goes to NI and the remaining $110,000 is amortized slowly? So in year 1 we have $511,000 ($500,000 plus the amortized value of $11,000) in NI and $99,000 in OCI?