What is the meaning of “corridor amortization”?

The rate of the corridor that is being implied on the amount of projected benefit obligation is 10%. It is used in ascertaining the net periodic pension cost of an organization.

Corridor amortization is a term used when the organization's unrealized net gain or net loss exceeds 10% of the opening balance of defined benefit obligation as prescribed under the IASB criterion. The difference amount between the two should be amortized in a pension worksheet by the organization. The main thing that has to be noted here is that the total amount of the net gain or loss amortized should be less than the actual amount of amortization computed by taking into consideration the average remaining years of service of an employee.