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alsevns
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| Posted: 07 Mar 2011 at 17:19 | IP Logged
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I had a question regarding calculating the pension gains and losses. Do you automatically use the Corridor Approach? I know that US GAAP has two choices when accounting for gains and losses, but the answers to questions always used the Corridor Approach to get the right answer. Thanks!!
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tkphotomania
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| Posted: 07 Mar 2011 at 17:50 | IP Logged
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I was anxious to know, so I looked it up.
According to Wiley (Pensions, P381, 2011 Wiley Exam Review),
"...Unlike past service cost, which requires a systematic method applied on
a consistent basis, the amount to be amortized is not necessarily the
calculated amount of the cumulative unrecognized net gain or loss.
Instead, the minimum amount subject to amortization is determined by
the use of corridor approach."
In my opinion, you don't have to make it more complicated than it has to
be. Most of the actual exam questions are simple.
Just remember this: to calculate unrecognized net gain or loss from
previous periods, use corridor approach.
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alsevns
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| Posted: 07 Mar 2011 at 17:51 | IP Logged
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Wow, thank you so much!! What a big help.
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tkphotomania
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| Posted: 07 Mar 2011 at 18:24 | IP Logged
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You are welcome!!
I thought I should know this stuff, too because I might have to retake FAR
(took it last Sat.)....ha ha.
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alsevns
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| Posted: 07 Mar 2011 at 18:27 | IP Logged
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I am retaking it after taking it in November :( How did you feel about the test? I am going to renew my NTS tomorrow.
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Topic: Pension Gains/Losses
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