Massively confused here. So we are saying if the past service cost and acturial gains and losses exceed 10% of greater of (1) PBO or (2) Market valude of assets, we amortise. If it is less than 10%, we defer. My question is, am I correct that in no circumstance do we simply apply the following calculation? Current Service Cost + Interest Expense - Expected Return on plan assets +/- Past Service Cost +/- Acturial Gains and Losses
I would apply the following equation unless otherwise it is specifically noted in the question. I do not remember this being an issue on the EOC questions…and that they would give you the amount that is being amortized for the actuarial gains/losses. I believe the whole thing with the corridor method could be trivial pursuit question, and not something they would have you calculate.