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How to calculate the net gain or loss on plan assets throughout the year?

The first step is to calculate the expected return on plan assets. Next, you compare the expected return to the actual return, and that results in a net gain or loss, which is recorded to other comprehensive income. For example, if the company had an actual return on plan assets of $100,000 as compared to an expected return of $77,000, then the company would record a net gain of $23,000.

Since the company recorded a net gain, the gain impacts other comprehensive income. The journal entry to record the net gain would be a debit to pension asset/liability and a credit to other comprehensive income (increases OCI).

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