[tingtuzii]

Hi guys, i feel really confused about the amortization of unrecognized gains or losses, which is from the difference between expected and actual return on plan assets. Should the current period difference be amortized in the following year or be reported in current year OCI? There are a few questions in Becker to test this point. But the solutions to explain it are controversial. I need your help to understand it. Thank you in advance!

[harris016]

I got caught on this same issue multiple times in the mcqs.

You have to remember how you are coming up with the amortization amount. You are getting it from the difference between the expected and actual return on the plan assets. You will know what the expected returns are at the beginning of the year…but technically you will not know the ACTUAL return until the end of the year.

With that said you cannot amortize the amount in that year because you are coming up with that number at the end of the year, Calculate it and amortize it beginning the next year.

[harris016]

I got caught on this same issue multiple times in the mcqs.

You have to remember how you are coming up with the amortization amount. You are getting it from the difference between the expected and actual return on the plan assets. You will know what the expected returns are at the beginning of the year…but technically you will not know the ACTUAL return until the end of the year.

With that said you cannot amortize the amount in that year because you are coming up with that number at the end of the year, Calculate it and amortize it beginning the next year.

[Author]

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