IAS 19 — Actuarial gains and losses, group plans and disclosures


In July 2002, the IASB decided that the differences between IAS 19 Employee Benefits (1998) and national standards should be addressed in a broad-scope convergence project.

The following topics were included in scope of the convergence project:

  • How the total change in value of plan assets should be reported in a statement of comprehensive income
  • Disclosure of an allocation of plan assets across broad categories, such as equities, fixed income securities, property, etc.
  • Whether the immediate recognition of actuarial gains and losses arising on the defined benefit obligation should be retained as an option (as currently in IAS 19), made mandatory, or prohibited. Those who favour immediate recognition feel that the IAS 19 corridor approach amounts to 'income smoothing'. Those who support a corridor or spreading approach feel that such approach is appropriate given (i) the allocation of benefits earned to periods of service and (ii) the recognition of unvested past service cost over the vesting period.
  • Whether the 'asset ceiling' of IAS 19 should be retained.
  • Whether certain guidance from FASB Statements 106 and 112 (which deal with non-pension benefits) should be incorporated into a revised IAS 19.

However, the following topics are outside the scope of this project:

  • Whether the defined benefit obligation should reflect current salaries rather than expected final salaries
  • Whether a defined benefit plan should, in some circumstances, be fully consolidated into the entity's financial statements.


Current status of the project

This project has been completed. Amendments to IAS 19 Employee Benefits were issued on 16 December 2004.


Project milestones

29 April 2004 Exposure Draft Proposed Amendments to IAS 19 Employee Benefits: Actuarial Gains and Losses, Group Plans and Disclosures published Comment deadline 31 July 2004
16 December 2004 Amendments to IAS 19 Employee Benefits issued Effective for annual periods beginning on or after 1 January 2006. The new option to recognise actuarial gains and losses in other comprehensive income available for annual periods ending on or after 16 December 2004

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