 |
Definition of 'Corridor Rule'
In financial accounting, the corridor rule is a materiality rule that requires disclosure of a pension actuarial gain or loss, if the gain or loss exceeds 10% of the greater of the Pension Benefit Obligation (PBO) or the fair value of plan assets. If this is the case, then the corridor rule allows this actuarial gain or loss to be amortized gradually over time into the income statement.
|
 |
Investopedia explains 'Corridor Rule'
Overall, the corridor rule can be seen as having a smoothing effect with respect to reporting pension gains and losses. The corridor rule was established under FASB Statement 87 in December, 1985. According to this statement, the prior accounting standards for pension reporting were too weak, and resulted in inconsistent reporting methods between companies, and sometimes even different methods from one period to the next.
|
Search results for 'Corridor Rule'
-
http://www.investopedia.com/articles/insurance/10/avoid-modified-endowment-contract-traps.asp
... Corridor Rule In a general sense, the corridor rule states that in order for any
life insurance policy to avoid being classified as a MEC, there must be a ...
|
|
