[jckund]

So I’m reviewing becker and going through MCQ and came across what I think is an inconsistency.

For gains and losses, it says they arise from two sources: the difference between actual and expected, and actuarial gains and losses.

Now it says these gains/losses must be amortized over time (if in OCI) using the corridor approach, but then on pg 8 and on some of the MCQ answers it says the difference bt actual and expected must be amortized on a straight line basis immediately starting next year.

So the actuarial assumptions are the only ones that use the corridor approach? Or how does amortization work?

[MrsBing]

The corridor approach uses straight line. You take the difference between actual and expected gains/losses and either expense it immediately or take to OCI. If you take to OCI, it'll be amoritized by taking the balance in OCI for gains/losses as of the beginning of the year then subtracting the greater of 10% PBO or Market Value. Then you take this excess and divide by the average remaining service life. <This is the straight line portion.

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