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Post-employment Benefits


Following numerous criticisms over the years (especially on recognition of deferred gains (losses) and the inadequacy of the valuation model) by analysts, preparers and users of financial statements on the accounting model to be applied to post-employment benefits in IAS 19, in July 2006, the IASB decided to add the project on post-employment benefits to its agenda. The project post-employment benefits (including pensions) was initiated jointly by the IASB and the FASB as part of the Memorandum of Understanding.


The project was intended to conduct a comprehensive review of all aspects of accounting for post-employment benefits. However, the IASB decided to start with the publication, by 2011, of an “intermediate” accounting standard that would significantly improve the accounting for pensions.


Following the comments received on Discussion Paper Preliminary Views on Amendments to IAS 19 Employee Benefits in March 2008, the IASB decided to publish three separate exposure drafts on the following topics:
1) an ED on the discount rate used to assess the benefits for employees. The document Discount Rate for Employee Benefits, issued in August 2009, proposed to remove the requirement to use a government bond rate when there is no deep market in high quality corporate bonds. Therefore, this rate would have to be determined in all cases by reference to market yields at the end of the reporting period on high quality corporate bonds. In October 2009, the Board decided not to proceed with the proposed amendment;
2) an ED for the recognition and presentation of changes in defined benefit obligation (DBO) and in the plan assets, on the related disclosures to be provided and on other issues raised in comment letters on the DP that can be addressed quickly. In April 2010, the IASB published ED Defined Benefit Plans - Proposed Amendments to IAS 19, in consultation until 6 September 2010;
3) an ED on contribution-based promises, as part of a broader review of accounting for pensions. The IASB has decided it will consider this topic at a later date (after 2011).

IASB Work Plan

The IASB plans to finalize the standard on Defined Benefit Plans by June 2011.

To summarize, the following table shows for each part, the timing and documentation produced by the IASB so far.


Current Status


 1. Discount Rate for Employee Benefits


 – ED Discount Rate for Employee Benefits (August 2009)

 2. Defined Benefit Plans

In progress

 – ED Defined Benefit Plans (April 2010)

 3. Contribution-based promises

Possibly after 2011


For more information, please refer to the IASB website.

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