Amortization of actuarial gains and losses refers to the systematic allocation of changes in the value of pension obligations that arise from differences between actual and expected outcomes in demographic and financial assumptions. These gains and losses typically emerge from changes in interest rates, life expectancy, or employee turnover rates, and are recognized over time to smooth their impact on financial statements. This process helps ensure that the effects of these adjustments do not significantly distort a company's earnings in any single period.
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