The IASB discussed a summary of comment letters received for the exposure draft Defined Benefit Plans and began re-deliberating the proposals relating to recognition and disaggregation.
The Board tentatively confirmed the proposals in the exposure draft that:
- an entity should recognise all changes in the net defined benefit liability (asset) when they occur.
- an entity should recognise unvested past service cost when the related plan amendment occurs.
- an entity should disaggregate changes in the net defined benefit liability (asset) into service cost, finance cost and remeasurement components. The Board will discuss at a future meeting whether an entity:
the service cost component should exclude gains and losses arising from changes in the assumptions used to measure the service cost. the finance cost component should comprise net interest on the net defined benefit liability (asset), determined by applying the same rate used to measure the defined benefit obligation to the net defined benefit liability (asset).
- should present those components in profit or loss or in other comprehensive income.
- should distinguish those components on the statements of profit or loss and other comprehensive income, or whether disclosure in the notes would be sufficient.
In November, the Board intends to discuss among other topics:
- presentation of the service cost, finance cost and remeasurement components;
- disclosures for defined benefit plans;
- classification of employee benefits; and
- accounting for settlements and curtailments.
In the light of its tentative decision on unvested past service cost, the Board confirmed its previous tentative decision to include in the definition of termination benefits only benefits provided in exchange