I am bit confused on how to classify this assumption as I have read conflicting references, and would appreciate some guidance. Would a change in the compensation growth rate go under actuarial g/l or service component of the pension expense? I am assuming that it is directly to the service component, but I read somewhere in the book that if the comp growth rate assumption changes, that it is a part of actuarial g/l?
Any changes in assumptions are part of actuarial g/l. It is either recognized immediately in income statement (or in other comprehensive income in IFRS) or if the the amount of cumulative g/l exceeds 10% of the greater of pension liabilities or assets, it is deferred and amortized using either the “corridor” method or faster recognition method. Does this answer your question?
Can you explain more ?