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Section 3462, Employee Future Benefits [Completed]

Effective date:

Fiscal years beginning on or after January 1, 2014. Earlier application is permitted.

Transitional provisions:

Effective for fiscal years beginning on or after January 1, 2014. Earlier application is permitted, but only for all of an entity's benefit plans.

Last updated:

October 2013


This new Section, which replaces Section 3461, requires immediate recognition of all gains and losses arising from defined benefit plans as they are incurred and, thus, eliminates deferral and amortization accounting.

The main changes for defined benefit plans are as follows: (i) The full amount of a defined benefit obligation, net of plan assets, is recognized in the balance sheet (subject to a ceiling test for a net asset). (ii) For plans that have an appropriate funding valuation, the obligation is measured using either that valuation or one prepared for accounting purposes, with the same choice applied to all such plans. For other plans, the obligation is measured using an accounting valuation. (iii) Changes in the fair value of plan assets and in the measurement of the plan obligation and asset ceiling, including past service costs and gains and losses arising from settlements and curtailments, are recognized immediately in income. (iv) "Remeasurements and other items" are disclosed in the notes to the financial statements, unless separately presented on the face of the income statement. (v) Plan obligations and plan assets are measured as of the balance sheet date. (vi) Some disclosure requirements are clarified as a result of these changes. (vi) A change has also been made to defined contribution plan accounting to recognize past service costs in the current period.

Recent activities

October 2013

On October 31, 2013, the AcSB issued a Basis for Conclusions in respect of the new Section 3462.

June 2013

In June 2013, the AcSB has issued a related ED for NFPOs. See separate proposed Part III standard, Reporting Employee Future Benefits by Not-for-Profit Organizations, in this regard.

May 2013

In May 2013, the AcSB has issued a new Section 3462, Employee Future Benefits, which replaces Section 3461.

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