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EFRAG issues draft endorsement advice and effects study report on limited scope amendments to IAS 19

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

22 Dec 2013

The European Financial Reporting Advisory Group (EFRAG) has issued for comment its draft endorsement advice for the use of the amendments to International Accounting Standard (IAS) 19 (Defined Benefit Plans: Employee Contributions (Amendments to IAS 19) in the European Union (EU). EFRAG has also issued their Effects Study Report.

The amendments to IAS 19, issued by the International Accounting Standards Board (IASB) in November 2013, clarify the requirements that relate to how contributions from employees or third parties that are linked to service should be attributed to periods of service. In addition, it permits a practical expedient if the amount of the contributions is independent of the number of years of service. The amendments are effective for annual periods beginning on or after 1 July 2014, with earlier application being permitted.

EFRAG supports the adoption of the amendments to IAS 19 and recommends its endorsement.  EFRAG’s initial assessment is that the amendments to IAS 19 meet the technical requirements of the Regulation (EC) No 1606/2002 of the European Parliament and of the Council on the application of international accounting standards.     

EFRAG’s conclusion is supported by an Effects Study Report which considers the costs and benefits of implementing the amendments to IAS 19. EFRAG’s assessment is that the benefits for preparers and users in implementing the amendments to IAS 19 outweigh the costs.

Comments are requested by 17 January 2014. 

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