Deloitte comment letter on ED/2009/4 'Prepayments of a Minimum Funding Requirement – Proposed amendments to IFRIC 14'
We recognise that the application of the requirements of IFRIC 14 to prepayments of a minimum funding requirement (“MFR”) results in some cases in an accounting treatment that does not reflect the substance of the transaction. We agree that this unintended result needs to be addressed and we believe that the solution proposed would address appropriately the issue that was brought to the attention of the Board (the so-called “Swiss plans” issue).
However, we are concerned that the IASB is adopting a piecemeal approach to addressing this problem and that the amendments proposed will result in additional ambiguities in the application of IFRIC 14 and inconsistent accounting treatments. As a result, we do not support the proposed modifications to IFRIC 14.
