IASB issues amendments made to IAS 19
The International Accounting Standards Board (IASB) has recently issued amendments to IAS 19 Employee Benefits in relation to pension accounting.
Amendments with reference to IAS 19 in relation to Plan Amendment, Curtailment or Settlement specify that how a company will cope when a change occurs in a defined benefit plan and how the pension expenses in relation to it will be determined.
IAS 19 specifies the accounting treatment for a defined pension plan. It also provides guidance with regards to changes occurring to a plan whether it is the form of an amendment, settlement or curtailment, the standard also requires an entity to re-measure its net defined asset or liability.
The amendments made to IAS 19 now require that an entity should use the underlying updated assumptions with regards to the re-measurement of its defined plan so that to determine the current service cost as well as net interest that will be accounted for by the entity in the period after changes are made to the plan.
No information has been provided as to how the pension expenses will be determined for the period after the amendments are made to the plan. It is expected that when a company will use the updated assumptions then the amendments made to IAS 19 will provide the users of financial statements with much more useful information in relation to the company’s defined plan.
The amendments made to IAS 19 will come into effect on or after January 1, 2019.