Gain/Loss due to actuarial assumption in pension expense

2013 CFA L2 Schweser Book 2 page# 222, question#11

I have a question here, “Loss due to change in acturial assumptions during the year” is not included into the pension expense, I want to make sure it’s because this loss is less than 10%(corridor) of the beginning plan assets or PBO, then it’s not amortized in the income statement (recorded in OCI). Thanks for your time, please correct me if i am wrong.

You are right. If acturial loss if less than 10% it stays in OCI under both IFRS and GAAP. If it’s higher than 10%, only under GAAP, it is amortized using corridor approach to IS; under IFRS stays in OCI.

Just remember its less than 10% of the GREATER of begining plan assets or PBO

I believe this chapter has been simplified to the extent you dont have to know the corridor approach.