Build Linden Peak's pension cost, OCI, AOCI, and employer entry

Problem

At Linden Peak's close meeting, the actuary brings a $900,000 amendment and a $300,000 obligation loss, the trustee brings $1.60 million of actual return, and accounting brings a $3.00 million opening AOCI loss. The question is not which number is pension expense. Build the current-period routes that let all four records coexist without duplication.

Periodic cost is an assembly, not a cash number

Actual return is $1.60 million, but expected return is $1.40 million. Substituting actual return in periodic cost would erase the $200,000 asset gain from its OCI route. The expected long-term return is a supported accounting assumption, not a forecast that this year's assets must earn exactly that amount.

Only the $1.50 million service-cost component can be eligible for capitalization as part of another asset, and only if that other asset's guidance permits it. The table does not establish that any amount should be capitalized here.

Keep current OCI and ending AOCI distinct

The amendment and obligation loss initially increase the accumulated loss layers. The asset gain and current amortizations reduce them:

Opening AOCI contains a $3.00 million pretax net loss. Adding current OCI gives a $3.72 million ending loss. The two amortization amounts enter periodic cost and leave AOCI once; they are reclassifications, not new economic losses.

Apply the supplied corridor policy without inventing one

The greater opening base is the $25 million opening PBO. Ten percent is $2.50 million. The $3.50 million opening net loss exceeds that threshold by $1.00 million; division by the supported ten-year average remaining service period produces $100,000 of current amortization.

Threshold = 10% × $25,000,000 = $2,500,000
Excess    = $3,500,000 − $2,500,000 = $1,000,000
Amortize  = $1,000,000 ÷ 10 years = $100,000

This is a reperformance of Linden Peak's supplied policy. It does not select a recognition policy for management or imply that the corridor is an actuarial confidence interval.

Reconcile funded status and the employer entry

The independent rollforwards end at $27.55 million PBO and $23.50 million plan assets, so the recognized liability is $4.05 million. Opening funded status was $(3.00) million; the liability increases $1.05 million.

Dr pension cost—service                    $1,500,000
Dr pension cost—other                         130,000
Dr OCI—benefit-plan loss                      720,000
    Cr cash—employer contribution                       $1,300,000
    Cr net pension liability                            1,050,000

Debits and credits are both $2.35 million. The balanced entry is a release control only because obligation, assets, periodic cost, OCI, contribution, and funded status were independently supported first.

Stop on special-event labels

The July amendment creates supplied prior-service cost. The year-end freeze stops specified future accruals but does not extinguish earned benefits. It is not a settlement merely because management calls it one. An unsigned annuity quote likewise does not prove an irrevocable transfer of primary responsibility. Evaluate settlement, curtailment, remeasurement, termination-benefit, and disclosure consequences from executed terms and event-date evidence.

The supplied lower-rate scenario gives a $28.50 million obligation; the higher-rate scenario gives $26.70 million. Those conditional changes do not select the discount rate, quantify probability, or replace the full disclosure rollforward and assumption evidence.