<nobr>May 3, 2010</nobr>

IASB Publishes Exposure Draft on Defined Benefit Plan Accounting

The International Accounting Standards Board on April 29 released for public comment an exposure draft of proposed amendments to IAS 19 Employee Benefits to amend the accounting for defined benefit plans. According to the IASB, the amendments would address "deficiencies" in IAS 19 by requiring entities:

• To account immediately for all estimated changes in the cost of providing these benefits and all changes in the value of plan assets (often referred to as removal of the 'corridor' method). IASB proposes to remove from IAS 19 options that allow a company not to recognize some gains and losses that arise when a company changes its estimate of a defined benefit obligation, or when there are changes in the fair value of its plan assets, and instead proposes that companies recognize these items immediately.


• To use a new presentation approach that would distinguish between different components of the cost of these benefits. The new presentation approach under the exposure draft proposes that companies present: service cost - in profit or loss; finance cost - as part of finance costs in profit or loss; and remeasurement - in other comprehensive income.


• To disclose clearer information about the risks arising from defined benefit plans. The exposure draft proposes improved disclosure requirements about matters such as the characteristics of the company's defined benefit plans, the amounts recognized in the financial statements, risks arising from defined benefit plans, and participation in multi-employer plans.

IASB indicated that following input from interested parties, it plans to publish a final standard in 2011. Comments on the exposure draft must be received by September 6, 2010.

Project Summary

IASB Snapshot

IASB Exposure Draft

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