Amended IAS 19 released: Is the Glass half-full or half-empty?

The IAS Board has eventually released the long-awaited amended standard IAS 19 Employee Benefits (a 175+ pages document!).  The main changes consist of:

• eliminating an option to defer the recognition of gains and losses, known as the ‘corridor method’, targeting improvement of comparability and faithfulness of presentation. 
• suppression of the concept of expected return on assets  and explicit requirements to consider the tax on contribution effect on DBO.
• streamlining the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring remeasurements to be presented in other comprehensive income (OCI), thereby separating those changes from changes that many perceive to be the result of an entity’s day-to-day operations.
• enhancing the disclosure requirements for defined benefit plans, providing better information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in those plans. 
• amending the treatment of Termination Benefits by excluding stay-bonuses from this category and distinguishing termination as a result of employer's or the employee's decision. 

These changes - effective as from FY 2013 -  bring IAS 19 more in line with the IFRS framework. However, we can doubt they will effectively contribute to give a more reliable economic view on the financial position of the reporting entities (mthe obligation mresaurement remain highly volatile)  if as noted by many obsevers a second Phase does not complete the revision process. It is indeed not clear whether the IASB (currently in a transition phase: members have to be replaced) intends to take this on the agenda at short notice. In this case, entities would have to cope with a half-revised standard. So,...

More specifically, from a Belgian viewpoint: 

• the accounting of DC plans would not be affected by the amendments because the IAS Board eventually decided to remove the modification of back-loaded plan rule that would have seriously affected them.
• the tax impact on DBO may be significant.
• we advise to pay special attention  to the treatment of Employee contribution and Termination Benefits as well as to the impact of the suppression of the expected return on assets.