The IASB continued its discussion of the proposals in the exposure draft Defined Benefit Plans (the ED). At this meeting the Board discussed:
- the presentation of remeasurements;
- disclosure and administration costs; and
- the effective date and transition requirements.
Presentation of remeasurements
In December 2010 the Board tentatively decided to allow an entity to present remeasurements in profit or loss. In January 2011 the Board confirmed that decision but added some restrictions, such as making the election irrevocable, and asked the staff to assess whether the option should be restricted further. At this meeting the Board decided, in the light of that initial assessment, to revert to, and confirm, the proposal in the ED that remeasurements should be presented in other comprehensive income. The decision was supported by eight Board members. The remaining seven Board members would have preferred either to confirm the decision reached in January or to allow a free choice.
Disclosure and administration costs
At the November and December 2010 Board meetings the Board asked the staff to obtain input from the Employee Benefits Working Group on particular aspects of the tentative decisions to date on disclosure and administration costs.
On the basis of this feedback the Board tentatively decided unanimously:
- to require the disclosure of the weighted-average duration of the defined benefit obligation, and that the amendments should include examples of the types of additional information that could be provided about the maturity analysis to meet the disclosure objective; and
- that administration costs related to the management of plan assets should be deducted from the return on plan assets.
The Board also decided, by a vote of nine to six, not to proceed with a requirement to disclose a disaggregation of the defined benefit obligation. Instead, the amendment should include an example of the type of disclosure that may meet the disclosure objectives.
Effective date and transition requirements
The Board decided to defer its decision on the effective date but tentatively agreed that it should not be earlier than 1 January 2013. The Board will discuss the effective date as well as early application as part of the broader consideration of the feedback received from the consultation on the Request for Views on Effective Dates and Transition Methods.
Subject to the Board's broader consideration of transition, the Board tentatively decided unanimously:
- that for entities already applying IFRSs, the amendments to IAS 19 should be applied retrospectively in accordance with the general requirements of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, except that:
- the carrying amount of assets outside the scope of IAS 19 need not be adjusted for changes in employee benefit costs that were included in the carrying amount before the beginning of the financial year in which this standard is first applied (ie previously unrecognised actuarial gains and losses and past service cost should be recognised by adjusting equity, not by adjusting the carrying amount of assets that include employee benefit costs); and
- comparatives need not be presented for the disclosures for the sensitivity of the defined benefit obligation for the year of initial application of the amendments to IAS 19;
- that for entities adopting IFRSs for the first time, the amendments to IAS 19 should be applied retrospectively in accordance with the general requirements of IFRS 1 First-time Adoption of International Financial Reporting Standards, except that the Board will allow a temporary exemption for entities adopting IFRSs with a date of transition to IFRSs before the effective date of the amendments to IAS 19. That exemption would mean that comparatives need not be presented for the disclosures for the sensitivity of the defined benefit obligation.
- to confirm the proposal in the 2010 exposure draft to delete paragraphs 153-156 of IAS 19 and paragraph D10 of Appendix D of IFRS 1.
Next steps
All the Board members agreed that, subject to balloting, the Board has satisfactorily completed all the steps required in the IASB Due Process Handbook.
The Board instructed the staff to begin the balloting process for the amendment to IAS 19. The Board plans to issue the amendment by the end of March 2011.
