23/07/2015 - EFRAG's draft comment letter on the IASB's Exposure Draft ED/2015/5 Remeasurement on a Plan Amendment, Curtailment or Settlement / Availability of a Refund from a Defined Benefit Plan (Proposed amendments to IAS 19 and IFRIC 14)
On 18 June 2015, the IASB issued the Exposure Draft ED/2015/5 Remeasurement on a Plan Amendment, Curtailment or Settlement / Availability of a Refund from a Defined Benefit Plan (Proposed amendments to IAS 19 and IFRIC 14) (the 'ED') with a comment period ending on 19 October 2015.
The proposals in the ED are designed to clarify some technical issues relating to specific situations in the measurement of defined benefit plans in accordance with IAS 19 Employee Benefits and IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The IASB proposes to clarify:
- that when a defined benefit plan is amended, curtailed or settled during a reporting period, the entity is required to use the updated assumptions about its obligation and fair value of its plan assets to determine current service cost and net interest for the period following the changes; and
- how the powers of other parties, such as the Trustees of the plan, affect an entity's right to a refund of a surplus from the plan.
EFRAG, in its draft comment letter on the ED, supports the proposals. However, EFRAG seeks input from constituents on any impediments in regard to the limited retrospective application of the proposals.
EFRAG requests comments by 9 October 2015.
The draft comment letter is available below: