The amendment fixes a perceived problem caused by the interaction of two aspects of IAS 19 - the option to defer actuarial gains and losses and the limit on the amount that can be recognised as an asset (the 'asset ceiling').
The Board concluded that IAS 19 was giving rise to counter-intuitive results because an actuarial loss in the pension plan could give rise to a reported gain in the entity's financial statements and an actuarial gain in the pension plan could give rise to a reported loss. The amendment prohibits gain or loss recognition in these circumstances.
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