The IFRIC completed its redeliberation of draft Interpretation D19, considered a revised draft and, subject to drafting changes, directed the staff to present the revised draft to the Board. The final Interpretation will be presented to the Board for ratification at its meeting in June, with the intention that it will be issued in July and become effective for financial periods beginning on or after 1 January 2008.
The IFRIC decided:
- to clarify in the consensus that minimum funding requirements are requirements for an entity to fund a post-employment defined benefit or other long-term plan, but not to include any examples illustrating such requirements.
- that an entity should recognise an asset for a refund only if it has an unconditional right to that refund, but not to link this requirement for recognition to the treatment of contingent assets under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
- that the assumptions underlying the calculation of the IAS 19 future service cost should be consistent with those underlying the defined benefit obligation at the balance sheet date. In addition, the entity should assume a stable workforce in the future unless the entity is demonstrably committed at the balance sheet date to make a reduction in the number of employees covered by the plan. In that case, the assumption about the workforce should be consistent with that reduction. An entity should not take into account projections of future reductions that it is not yet committed to.
- to state that an entity cannot recognise economic benefits from refunds, reductions in future contributions, or a combination of both based on assumptions that are mutually exclusive.
The IFRIC considered whether the changes from the draft Interpretation exposed for comment as D19 were such that re-exposure was needed in accordance with the IFRIC Due Process Handbook.The IFRIC concluded that they were not.
The IFRIC also decided that the Interpretation should be effective for reporting periods beginning on or after 1 January 2008.