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IAS 19 Amendments - Employee Benefits - Short term improvements


Analysts, preparers and other users of financial statements have voiced concerns about the IAS 19 accounting model over the years as follows:
- there are too many conceptual compromises;
- inconsistency with the Framework;
- the number of options for recognising gains and losses leading to lack of comparability; and
- the lack of clarity in the definitions of benefit promises.

As a result, in July 2006, the IASB launched a project on post-employment benefits. The project aims to make targeted improvements to IAS 19 Employee Benefits in a reasonably short time frame.

The main improvements the Board is considering are:
- the removal of the options for deferred recognition of gains and losses in defined benefit plans and the presentation of the cost of defined benefit promises .
- a new classification of benefit promises into contribution-based promises and defined benefit promises, with a new measurement attribute for contribution-based promises.

The IASB's Discussion Paper was published on 27 March 2008. On 17 October 2008, EFRAG issued its final comment letter supporting the immediate recognition of the full pensions liability with several conerns on other issues. The redeliberations of the IASB were included in the ED Defined Benefit Plans Proposed Amendments to IAS 19 (see relevant project page here).

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