News & Information

 

FEATURED PRODUCT

5500 Preparer's Manual for 2012 Plan Years

5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.

Learn More »

CCH® PENSION — 07/5/11

IASB finalizes amendments to its employee benefits standard

The International Accounting Standards Board (IASB) issued its amended version of IAS 19 Employee Benefits on June 16, 2011, after months of analysis (see CCH Pension Plan Guide Newsletter, Report No. 1880, March 21, 2011). According to an IASB press release, the project aimed to improve accounting for pensions and other post-employment benefits.

The amendments make the following changes, among others:

  • Elimination of an option to defer the recognition of gains and losses, known as the "corridor method," to improve comparability and faithfulness of presentation.
  • Streamlining of the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring remeasurements to be presented in other comprehensive income (OCI), thereby separating those changes from changes that many perceive to be the result of an entity's day-to-day operations.
  • Enhancement of the disclosure requirements for defined benefit plans, providing better information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in those plans.

The amendments were the result of a Memorandum of Understanding between the IASB and the Financial Accounting Standards Board (FASB) to work towards further aligning the standards from the two bodies. The elimination of the "corridor method" brings the U.S. generally accepted accounting principles (GAAP) closer to those of IASB.

Sir David Tweedie, IASB chairman, said, "The amendments to IAS 19 will ensure that investors and other users of financial statements are fully aware of the extent and financial risks associated with those commitments, in particular by requiring the surplus or deficit of a pension fund to be shown in the financial statements. At the same time, the amendments help to separate our the background noise of changes in pension liabilities from the underlying financial performance of the core business."

The amended version of IAS 19 is effective for financial years beginning on or after January 1, 2013.

For more information, visit http://www.wolterskluwerlb.com/rbcs.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

Visit our News Library to read more news stories.