The corridor method requires computing the amortization of net actuarial gains and losses under the$$ straight$-$line method. Will the amortization be the same each$$ year?

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Part $1$

A$.$

$$Yes$,$ it will be the same. Amortization will only commence if the accumulated unamortized balance of the net gain or loss is less than the corridor. The amount under the corridor is amortized. As companies only test the need for amortization in their first plan$$ year, the use of the$$ straight$-$line method allows for the same amount of amortization for the duration of the plan.

B$.$

$$No$,$ it will not be the same. Amortization will only commence if the accumulated unamortized balance of the net gain or loss is less than the corridor. The amount under the corridor is amortized. Even when the$$ straight$-$line method is$$ used, we should not expect the same amount of amortization each year. In$$ fact, there may be no amortization in the next year or the amount could be different depending on the results of the corridor test each year.

C$.$

$$No$,$ it will not be the same. Amortization will only commence if the accumulated unamortized balance of the net gain or loss exceeds the corridor. The excess over the corridor is amortized. Even if the$$ straight$-$line method is$$ used, we should not expect the same amount of amortization each year. In$$ fact, there may be no amortization in the next year or the amount could be different depending on the results of the corridor test each year.

D$.$

$$Yes$,$ it will be the same. Amortization will only commence if the accumulated unamortized balance of the net gain or loss exceeds the corridor. The excess over the corridor is amortized. As companies only test the need for amortization in their first plan$$ year, the use of the$$ straight$-$line method allows for the same amount of amortization for the duration of the plan.