At its meeting on June 12, 2014, the Group members of the AcSB’s IFRS Discussion Group (IDG) observed that the economics of such plans, the magnitude of the associated potential risk that employer contributions would increase, the fact that there is no further obligation to pay the benefits after the initial increase in employer contributions (as would be expected for a defined benefit plan) and materiality, could lead some to argue that they should be classified as defined contribution plans.

However, Group members supported that shared-risk plans with the characteristics described in the fact pattern are defined benefit plans. Such plans do not meet the IAS 19 definition of a defined contribution plan (for example, contributions are not fixed and the employer has a legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all the employee benefits relating to current and prior periods). While the likelihood an employer would need to increase contributions may be low, that probability isn’t relevant.

The Group did not recommend any further action be taken on this issue at this time.

Review the IFRS Discussion Group on the AcSB's Web site.

At its meeting on June 12, 2014, the Group members of the AcSB’s IFRS Discussion Group (IDG) made the following observations: (i) financial statements are a communications tool; (ii) IFRS requirements relating to non-GAAP and additional GAAP measures should not be applied with a checklist mentality; and (iii) financial reporting in this area is evolving positively. In summary, together, the guidance in IAS 1 and other IFRSs, the Exposure Draft proposals and the Staff Notice comprise the current body of material to be considered by preparers when deciding on disclosures for non-GAAP and additional GAAP measures. The Group did not recommend any further action be taken on this issue at this time. However, the Group noted that future developments in this area would provide the opportunity for further discussion on this topic at a later date.

Further, the Group members discussed the opening statement of financial position and noted that this issue is not about whether the information contained in the opening statement of financial position is audited. The statement is audited along with all information included in an entity’s financial statements. Rather, the issue at hand is whether the auditor’s report should make reference to the opening statement of financial position as being prepared in accordance with IFRSs. The majority of Group members did not express a preference. The Group did not recommend any further action be taken on this issue at this time.

Review the IFRS Discussion Group on the AcSB's Web site.