To compute the amortization of the cumulative unrecognized gains and losses in a pension plan,the corridor is computed as 10% of the higher of market-related value of pension plan assets or the projected benefit obligation.

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This statement is true. The corridor approach is a method used to determine when gains and losses in a pension plan should be amortized. The corridor is calculated as 10% of the greater of the market-related value of pension plan assets or the projected benefit obligation. If the cumulative unrecognized gains and losses exceed the corridor, then the excess must be amortized over future periods.

To Compute the Amortization of the Cumulative Unrecognized Gains and Losses