Actuarial Gain Or Loss
Actuarial gain or loss refers to an increase or a decrease in the projections used to value a corporation’s defined benefit pension plan obligations. The actuarial assumptions of a pension plan are directly affected by the discount rate used to calculate the present value of benefit payments and the expected rate of return on plan assets. The Financial Accounting Standards Board (FASB) SFAS No. 158 requires the funding status of pension funds to be reported on the plan sponsor’s balance sheet. This means there are periodic updates to the pension obligations, the fund performance and the financial health of the plan.