The International Accounting Standards Board (IASB) has instructed its staff to carry out more research into its project regarding defined benefit (DB) surplus accounting rules.
The controversial proposed amendments to asset-ceiling guidance under IFRIC 14 rules could lead to sponsors recognising huge additional liabilities, according to critics of the IASB’s proposals.
IASB members agreed that staff should “perform further work to assess whether [they can] establish a more principles-based approach… for an entity to assess and measure its right to a refund of a surplus”.
IASB vice-chair Sue Lloyd said: “It seems that we might be at risk of making a change that might only be relevant to one jurisdiction, where non-substantive changes might mean that that change has very little effect anyway.”
The focus of the staff’s research will be paragraph 11 of IFRIC 14, which specifies the circumstances in which an entity has a right to a refund. Staff said they also wanted to assess whether any work to clarify the words in paragraph 11 could be kept narrow in focus.
IASB director Petrina Buchanan said the board didn’t propose to change a “very strict differentiation” between a full and gradual settlement of a plan. She said staff expected to bring back papers to the board “probably before the end of the year”.
The board also agreed to proceed separately with proposed amendments to IAS 19. These changes deal with amendments, settlements and curtailments to DB plans.
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