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Post-employment Benefits (including Pensions)

IASB Meeting Summaries and Observer Notes

 IASB November 2010



The IASB discussed the proposals in the exposure draft Defined Benefit Plans relating to presentation, disclosure and classification.


The Board tentatively decided:

  • to confirm the proposals in the exposure draft that an entity should present the service cost and finance cost components in profit or loss;
  • not to specify where in profit or loss an entity should present the service cost and finance cost components;
  • to permit an entity to present the remeasurements component either in profit or loss or in other comprehensive income (rather than only in other comprehensive income, as the exposure draft had proposed);
  • to prohibit subsequent reclassification of the remeasurements component from other comprehensive income to profit or loss;
  • to permit, but not require, an entity to transfer within equity the cumulative amounts recognised in other comprehensive income; and
  • to confirm the proposals in the exposure draft that an entity should recognise the service cost, finance cost and remeasurements components in the statement of comprehensive income, unless another standard requires or permits their inclusion in the cost of an asset.


The Board tentatively confirmed the disclosure objectives and requirements proposed in the exposure draft, with the following amendments:

  • to focus the narrative description of the risks to which the plan exposes the entity on risks that are specific to the entity or unusual, without requiring excessive detail about generic risks;
  • to remove the proposals in the ED to disclose:
    1. how the effect of a change to each significant actuarial assumption that was reasonably possible at the beginning of the reporting period would have affected current service cost;
    2. a brief description of the process used to determine demographic actuarial assumptions; and
    3. a narrative discussion of the factors that could cause contributions over the next five years to differ significantly from current service cost over that period.
  • to add requirements to disclose:
    1. a narrative description of any funding arrangements and funding policy;
    2. the amount of expected contributions in the next year; and
    3. information about the maturity profile of the benefit obligation.
  • to modify the requirement to disaggregate plan assets into categories that distinguish the risk and liquidity characteristics of those assets. The Board tentatively decided to delete the exposure draft's proposed requirement to specify the minimum categories required and instead to provide examples of categories that could be disclosed to meet the principle of the disclosure.
  • to replace the proposed requirement to disclose the present value of the defined benefit obligation adjusted to exclude the effect of projected growth in salaries. Instead, there would be a requirement to disaggregate the defined benefit obligation. The Board asked the staff to explore further the basis of such a disaggregation.


The Board tentatively decided:

  • to retain the existing classification of post-employment and other long-term employee benefits. Consequently, the recognition, presentation and disclosure requirements for other long-term employee benefits will remain the same as in IAS 19.
  • to clarify that the classification of employee benefits as short-term employee benefits should be on the basis of when the whole amounts resulting from that type of benefit are expected to be settled.
  • to clarify that an entity should revisit the classification of a short-term employee benefit if the benefit no longer meets the definition of a short-term employee benefit.

Next steps

In December, the Board intends to discuss among other topics:

  • accounting for settlements and curtailments;
  • tax and administration costs;
  • accounting for risk-sharing features; and
  • multi-employer plan disclosures.

Date: 11/16/2010