IAS 19: Asset Ceiling Test

Date recorded:

  • Summary of Responses: 34 responses were received to the Exposure Draft. 21 of the responses agreed with the limited amendment. Seven were strongly against the amendment and they highlighted the need for a broader review of IAS 19 to look at the more underlying issues. A large proportion of all responses received requested that a more in depth review be performed on IAS 19. Many respondents felt that a 30-day comment period was not long enough for detailed responses to be given.
  • Decision: The Board concluded that this is a quick fix for a major issue that had been identified and the amendment would result in the improvement of IAS 19. The Board agreed to proceed with the amendment although they did recognise the need for a future review of other issues that existed within IAS 19 (namely the asset ceiling and smoothing of profits). The Board has agreed to make one change from the exposure draft, which was to add an extra paragraph clarifying the recognition of past service cost. Effective date will be the date of publication.

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