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IAS 19 Amended

The International Accounting Standards Board (IASB) announced on June 16, 2011 the completion of its project to improve the accounting for pensions and other post-employment benefits by issuing an amended version of IAS 19 Employee Benefits.

 

The amended IAS 19 eliminated deferment of recognition of non-vested past service cost and gains and losses (under the corridor approach). The impact on the financial statements is expected to be significant for most entities as the continued decline in benchmark interest rate have created actuarial losses over the past few years. It should be noted that most entities in the country use the corridor approach. Those who have just recently established or amended their plan will have to recognize the deferred past service cost immediately.

 

Another significant change is the more comprehensive disclosure requirement for defined benefit plans that includes various risk disclosures and analyses.

 

The amended IAS 19 will be applicable to accounting periods beginning on or after January 1, 2013 but earlier adoption is permitted.

 

ActuarialExponents is conducting a seminar on November 24, 2011 at Mandarin Oriental Hotel to help companies anticipate the effect of the amended standard and manage such effects as well as to provide insights on the best time to adopt it.