IFRIC 14 provides general guidance on how to assess the limit in IAS 19 Employee Benefits on the amount of a pension fund surplus that can be recognised as an asset.  It also explains how the pensions asset or liability may be affected when there is a statutory or contractual minimum funding requirement.

The Interpretation will standardise practice and ensure that entities recognise an asset in relation to a surplus on a consistent basis. No additional liability need be recognised by the employer under IFRIC 14 unless the contributions that are payable under the minimum funding requirement cannot be returned to the company.

IFRIC 14 is likely to have the most impact in countries that have a minimum funding requirement and where there are restrictions on a company's ability to get refunds or reduce contributions.

IFRIC 14 is effective for annual periods beginning on or after 1 January 2008. Earlier application is permitted.

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