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Question 7BE

Intermediate Accounting (Kieso)
Found in: Page 1162

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Short Answer

Shin Corporation had a projected benefit obligation of $3,100,000 and plan assets of $3,300,000 at January 1, 2017. Shin also had a net actuarial loss of $465,000 in accumulated OCI at January 1, 2017. The average remaining service period of Shin’s employees is 7.5 years. Compute Shin’s minimum amortization of the actuarial loss.

Actuarial loss is a term used when an organization bears a specific decrease in projected benefit obligation. It is highly influenced and affected by the discount percentage used in ascertaining the plan’s future worth.

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Step by Step Solution

Given the amounts:



Projected benefit obligation


Plan assets as on Jan 1, 2017


Actuarial loss


Average remaining service period

7.5 years

Computation of Shin’s minimum amortization of actuarial loss.



Net loss in accumulated OCI


Less: Corridor




Divide: Average remaining service life

7.5 years

Minimum amortization of the actuarial loss


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