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Net Periodic Pension Cost Calculator with 10 Percent Corridor (ASC 715)

What do these figures come to once the work is shown?

Service cost, interest cost, expected return, prior service cost and corridor amortization of net loss, split by line.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Net periodic pension cost
$970,000
Service cost plus other components
Service cost (operating)
$900,000
Interest cost
$1,000,000
Drawn to one scale
Net periodic pension cost$970,000
Service cost (operating)$900,000
Interest cost$1,000,000
Expected return on plan assets-$1,105,000
Corridor (10% of greater of PBO and assets)$2,000,000
Amortization of net loss (gain)$125,000
All results
MeasureResult
Net periodic pension cost$970,000
Service cost (operating)$900,000
Interest cost$1,000,000
Expected return on plan assets-$1,105,000
Corridor (10% of greater of PBO and assets)$2,000,000
Amortization of net loss (gain)$125,000
Other components (outside operating income)$70,000
How this was worked out
Work shownrecomputed as you type
Interest = PBO x discount rate
Expected return = market-related value x expected return
Corridor = 10% x greater of PBO and market-related value
Amortization = (net loss beyond corridor) / average remaining service
Cost = service + interest - expected return + prior service cost + amortization

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Interest = PBO x discount rate
  • Expected return = market-related value x expected return
  • Corridor = 10% x greater of PBO and market-related value
  • Amortization = (net loss beyond corridor) / average remaining service
  • Cost = service + interest - expected return + prior service cost + amortization

How it works

ASC 715-30-35-24 sets the minimum amortization of net gain or loss: the excess over 10 percent of the greater of the PBO or the market-related value of plan assets, divided by the average remaining service period of active participants. The tool uses opening balances and ignores contributions and benefit payments during the year.

ASU 2017-07 presents service cost with other compensation costs in operating expense and presents the other components outside income from operations. Only service cost is eligible for capitalization.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Can faster amortization be used?

Yes, any systematic method that amortizes at least the minimum, applied consistently to gains and losses.

Is market-related value the same as fair value?

It may be fair value or a calculated value that recognizes changes over no more than five years.

What if nearly all participants are inactive?

Use the average remaining life expectancy of inactive participants instead of service period.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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