Question

Shin Corporation had a projected benefit obligation of $3,100,000 and plan assets of $3,300,000 at January 1, 2020. Shin also had a net actuarial loss of $465,000 in accumulated OCI at January 1, 2020. The average remaining service period of Shin's employees is 7.5 years. Compute Shin's minimum amortization of the actuarial loss.

Answer 1

$18,000

Step-by-step explanation:

Projected benefit obligation = $3,100,000

Plan assets = $3,300,000

Corridor amount = Plan assets * Corridor percentage

Corridor amount = $3,300,000 * 10%

Corridor amount = $330,000

Accumulated loss = $465,000

Excess loss subject to amortization = $465,000 - $330,000

Excess loss subject to amortization = $135,000

Amortized to pension expense = Excess loss subject to amortization / Average remaining service

Amortized to pension expense = $135,000 / 7.5 years

Amortized to pension expense = $18,000