The IASB continued its discussion of the proposals in the exposure draft Defined Benefit Plans (the ED) relating to:
- the presentation of the remeasurements component of defined benefit cost; and
- settlements and curtailments.
Presentation of the remeasurement component
At its November 2010 meeting, the IASB tentatively decided that an entity could present the remeasurements component in either other comprehensive income (OCI) or profit or loss.
At this subsequent January meeting, the Board tentatively decided that, although remeasurements should be presented in other comprehensive income, there were circumstances in which it would be appropriate to allow an entity to elect to present remeasurements in profit or loss (primarily to address accounting mismatches) for a given plan. Accordingly, entities should be permitted to elect to present remeasurements in profit or loss. That decision was supported by nine Board members, on the conditions that any such election would need to be irrevocable and that amounts previously recognised in other comprehensive income would not be reclassified to profit or loss.
The staff were asked to assess whether any other restrictions should be placed on such an election.
All Board members supported requiring an entity to disclose why the remeasurements are presented in profit or loss.
Settlements and curtailments
The IASB tentatively decided
- that if a curtailment or plan amendment arises as part of a restructuring plan or is linked to termination benefits, the gain or loss should be recognised at the earlier of:
- when the related restructuring costs or termination benefits are recognised; or
- when the curtailment or plan amendment occurs.
Otherwise, the gain or loss should be recognised when the curtailment or plan amendment occurs.
- that if a termination benefit arises as part of a restructuring plan, the termination benefit should be recognised at the earlier of:
- when the related restructuring costs are recognised; or
- when the entity can no longer withdraw an offer of the termination benefits.
Otherwise, termination benefits should be recognised when the entity can no longer withdraw an offer of the benefits. to confirm the proposal in the ED that a settlement should be recognised when it occurs.
In February, the IASB intends to discuss the accounting for risk-sharing features and transition.