Reading 20- Employee compensation ( What to skip )

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vicky_cool400

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Hi
I m doing reading 20 and following arif irfanullah videos. As per him the US GAAP treatment of Remeasurement using corridor/faster recognition method is not testable fir the exam.
Can it be skipped ?
 
Vicky you keep asking these questions on multiple threads. ANY material in the book apart from the Optional sections can be tested in the exam, it doesn’t specifically have to be stated in the LOS
 
vicky_cool400 wrote:
Hi
I m doing reading 20 and following arif irfanullah videos. As per him the US GAAP treatment of Remeasurement using corridor/faster recognition method is not testable fir the exam.
Can it be skipped ?
Click to expand...
And how does he know that? He is simply making a dangerous bet so that you can feel more comfortable. Dangerous for you, not so much for him.
According to the institute all material in the CFA books is relevant except for the optionlal parts and there is no more reliable source of information.
 
Wortek and others can you please explain corridor approach. Not able to get the logic
 
If the net cumulative unrecognized actuarial G+L (beginning balance) EXCEEDS the corridor (= 10% of greater of 1) defined benefit obligation (beginning balance) or 2) fair value of plan assets (beginning assets)), you start the amortization of the EXCESS amount OVER the expected average remaining working lives of plan employees.
FV of PA= 1,200 DBO= 2,300 CumUnrecALoss= 300 EARWLofplanempl=5 years
Corridor= 2,300*10%=230
70/5 years= amount of amortization= recognized in pension expense in P&L ( OIC is reduced in equity)
Simple.
 
I strongly belive that the 10% corridor approach has historically been the biggest pain in the a..e in accounting.
If it is any consolation IFRS accounting for pensions used to be even worse just a year or so ago.
In any case, I will try to prepare something helpful for those struggling with this topic and post a link here.
 
Yes wojtek please provide some inpuits hw to tackle this readings. I heard that CFA institute is reducing the difficulty level each passing year
 
Need help with Q7, can someone clarify why reclassify $210 million as an outflow related to financing activities rather than operating activities?
Thanks
 
Vicky,
how is arif’s videos by the way…had seen his level 1 and found pretty ok.. had he posted some videos for trail for level 2? thanks
 
Nick i have found his L2 videos very good barring 1 odd reading. Go for it
 
Krisztina wrote:
If the net cumulative unrecognized actuarial G+L (beginning balance) EXCEEDS the corridor (= 10% of greater of 1) defined benefit obligation (beginning balance) or 2) fair value of plan assets (beginning assets)), you start the amortization of the EXCESS amount OVER the expected average remaining working lives of plan employees.
FV of PA= 1,200 DBO= 2,300 CumUnrecALoss= 300 EARWLofplanempl=5 years
Corridor= 2,300*10%=230
70/5 years= amount of amortization= recognized in pension expense in P&L ( OIC is reduced in equity)
Simple.
How is OIC *reduced*. Would think increased.
Click to expand...
 
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