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AMENDED IAS 19 IMPACT QUANTIFIED

A survey on eighty-four companies showed that around 60% will have to absorb the negative impact of the Amended IAS 19 which will take effect for reporting periods beginning on or after January 1, 2013. This means that these companies will have to increase the liability recorded in their books. The average adjustment is about 28% percent of the annualized salaries. The maximum adjustment is 107%.

The companies that will benefit from the amended standard representing 40% of the companies surveyed will have to adjust their liabilities downward. The average adjustment is around 16%. For these companies, the implmentation of the amended standars present a perfect opportunity to set up or improve their retirement program as the past service cost will be partially/fully offset by the reduction in the liability recognized.