IASB Revisits IAS 19

February 25, 2002 (PLANSPONSOR.com) - The International Accounting Standards Board (IASB) is reexamining IAS 19, the rule that affects pension accounting, and has published an exposure draft of a limited amendment to the rule.

The Board is seeking to resolve a problem created by the interaction of two aspects of IAS 19 that have proved troublesome for the accounting profession:

  • the option to defer gains and losses in the pension fund
  • the limit on the amount that can be recognized as an asset, or the asset ceiling.

According to the IASB, the combination of these two aspects can sometimes require companies to report either an increase or a decreased in profit.

The Chairman of the IASB, Sir David Tweedie, said “We shall soon be considering a proposal to reexamine IAS 19 more generally with a view to the convergence of pension accounting standards worldwide.”

The text of the exposure draft ‘Amendment to IAS 19, Employee Benefits: The Asset Ceiling’ is available on the IASB Website .

Based in the UK, the IASB is an independent, accounting standard setter, which aims to develop a single set of enforceable global accounting standards that require transparent and comparable information in general purpose financial statements.

The board cooperates with national accounting standard setters to achieve convergence in accounting standards around the world.