IASB proposes amendments to IAS 19 and IFRIC 14 to clarify two issues
29 June 2015
The IASB proposes amendments to IAS 19 and IFRIC 14 that, if finalised, will clarify that:
─ when an entity determines the availability of a refund from a defined benefit plan:
- the amount of the surplus an entity recognises as an asset on the basis of a future refund should not include amounts that other parties, such as pension trustees, can use for other purposes (for example, to enhance pension benefits), without the entity’s consent; and
- an entity should not assume a right to a refund on the basis of gradual settlement of the plan if other parties can wind up the plan without the entity’s consent;
─ when a significant event, such as a plan amendment, curtailment or settlement occurs; the current service cost and net interest for the period following the significant event should be determined using the assumptions used in remeasuring the net defined benefit liability (asset); and
─ the current service cost and the net interest in the current reporting period prior to a plan amendment, curtailment or settlement should not be included in the past service cost or gain or loss on settlement.
The IASB did not propose an effective date for the proposed amendments. However, plans call for early application to be permitted. Comments on the proposals are due by 19 October 2015.