Exposure Draft – Employee Benefits, Proposed Section 3251

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Jul 28, 2021

On July 28, 2021, the Public Sector Accounting Board (PSAB) issued Exposure Draft – “Employee Benefits, Proposed Section 3251,” which outlines principles for the first of several phases of the revised employee benefits standard. In this first phase, the Board focused on discount rate guidance and deferral provisions. Comments are requested by November 25, 2021.

The main features of the Exposure Draft are as follows:

  • Accounting guidance for short-term employee benefits, post-employment benefits, other long-term employee benefits and termination benefits have all been considered in this Exposure Draft.
  • Accounting for defined benefit plans results in a public sector entity recognizing the following amounts in surplus or deficit: current service cost, any past service cost and gain or loss on settlement, and net interest on the net defined benefit liability (asset).
  • Revaluations of the net defined benefit liability (asset) are recognized in net assets and are not reclassified to surplus or deficit in subsequent periods.
  • The discount rate used to discount post-employment benefit obligations is determined based on an assessment of the post-employment benefit plan’s funding status.
  • A simplified approach is used to account for other long-term employee benefits as they are not usually subject to the same degree of uncertainty as the measurement of post-employment benefits. This simplified method does not recognize revaluations in net assets.

Review the exposure draft and In Brief on the PSAB's website.

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