Prior service cost is amortized on a

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The most common method of amortizing prior service cost is the years-of-service method or on a straight-line basis over the average remaining service life of active employees. This method recognizes that the prior service cost is a result of past service already rendered by employees and should be allocated to future periods based on the expected future years of service. The straight-line basis over 15 years (C) and the straight-line basis over the average remaining service life of active employees or 15 years, whichever is longer (D) are less commonly used methods and may not accurately reflect the expected future years of service of employees.

Prior Service Cost Is Amortized on a