IAS 19 — Plan amendments, curtailments or settlements (Minor plan events)

Date recorded:

Plan amendments, curtailments or settlements (Minor plan events) — Agenda Paper 2


The IASB issued an exposure draft in 2015 to amend to IAS 19 Employee Benefits and IFRIC 14 IAS19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction), using work undertaken by the Interpretations Committee. The ED proposed requiring that if the net defined benefit liability (asset) is remeasured in accordance with paragraph 99 of IAS 19 (i.e. when a plan amendment, curtailment or settlement occurs) the current service cost and the net interest for the period after the remeasurement are determined using the assumptions used for the remeasurement and the net interest for the remaining period is based on the remeasured net defined benefit liability (asset). The current service cost and the net interest in the current reporting period before a plan amendment, curtailment or settlement are not affected by, or included in, the past service cost or a gain or loss on settlement.

The comment letters were discussed by the Interpretations Committee in July and September 2016 and the IASB in December 2016.

When the Interpretations Committee discussed the feedback, the discussion was mostly focused on minor events. The staff had proposed excluding minor events from the amendments, but the Interpretations Committee voted not to exclude minor plan events and to rely on materiality. In December the IASB supported the recommendations of the Interpretations Committee but asked the Committee to consider the implications of not excluding minor plan events.

Staff analysis

The staff analysis was that not excluding minor plan events could change whether and when entities remeasure the net defined benefit asset or liability. The main reason was that entities would need to consider the future consequences of the change, and not just the effect on the past service cost. The staff demonstrated this using some fact patterns, including a curtailment, and their assessment is that such an outcome is appropriate.

Staff recommendation

The staff recommended that the Interpretations Committee recommend to the IASB that it:

  1. Finalise the proposed amendments with no substantive changes in respect of minor plan events; and
  2. Update the explanation in paragraphs BC17 and BC19 of the Exposure Draft to reflect the conclusion that the amendments could lead to more frequent remeasurements.


The IC approved the Staff’s recommendation without any technical debate, and cautioned the Staff to be careful when drafting so as not to confuse minor plan events with immaterial plan events.

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