Plan curtailment

A plan curtailment triggers a reduction in or elimination of the accrual of additional benefits for employees. If there is a curtailment of a benefit plan, the associated amount of prior service cost already recorded in accumulated other comprehensive income that is related to future years of service should be recognized in earnings as a loss. Also, the projected benefit obligation may be increased or decreased by a curtailment. This is a curtailment gain in the amount by which it exceeds any loss included in accumulated other comprehensive income. This is a curtailment loss in the amount by which it exceeds any net gain included in accumulated other comprehensive income. A curtailment loss should be recognized in earnings when the amount can be reasonably estimated and the curtailment is probable. A curtailment gain should be recognized in earnings when the plan is formally suspended or the impacted employees are terminated.