Final answer:
The Accumulated Other Comprehensive Income (G/L) account is not amortized based on a certain percentage of the beginning balances of the projected benefit obligation or the market-related plan assets value.
Step-by-step explanation:
The statement or question is false. The Accumulated Other Comprehensive Income (G/L) account is not amortized based on whether it exceeds 10 percent of the larger of the beginning balances of the projected benefit obligation or the market-related plan assets value.
The statement about Accumulated Other Comprehensive Income (AOCI) being amortized only if it exceeds 10 percent of certain balances is false. AOCI includes various deferred income items, and certain items such as pension plan gains and losses may be amortized according to specific actuarial determinations, not a strict 10 percent rule.
The statement is false. Accumulated Other Comprehensive Income (AOCI) represents the cumulative amount of other comprehensive income items, which include unrealized gains and losses on certain investments, foreign currency translation adjustments, and other items that are not included in net income. According to the accounting standards, these items are not immediately recognized in net income but are instead deferred and accumulated in AOCI within equity. On the specific point of amortization, certain deferred amounts that are recorded in AOCI, such as gains and losses on pension or other postretirement benefit plans, could be subject to amortization. However, the criterion is not based on a strict 10 percent threshold relating to the projected benefit obligation or market-related plan assets. Instead, the minimum amortization, known as the 'corridor approach', is based on amounts exceeding 10 percent of the greater of the plan's projected benefit obligation or the market-related value of plan assets. Amortization amounts are then determined actuarially and recognized in net periodic pension cost over time.