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+--- Thread: IAS 19 question (/showthread.php?tid=4754)
IAS 19 question - noman - 09-12-2007
Someone plz explain why we are taking unrecognised 'losses' and 'service cost' and comparing them with Farivalue of asset...
these are items with nature of expense.......why do we add them to
present value of economic benefits which seem to be of nature of an asset....?
PARA 58
The amount determined under paragraph 54 may be negative (an asset). An
entity shall measure the resulting asset at the lower of
(a)the amount determined under paragraph 54; and
<font size="2">
(b)the total of
(i)<font color="red">any cumulative unrecognised net actuarial losses and past service cost
(see paragraphs 92, 93 and 96); and
(ii)the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.</font id="red">
</font id="size2">
PARA 54
The amount recognised as a defined benefit liability shall be the net total of the
following amounts
(a)the present value of the defined benefit obligation at the balance sheet date
(see paragraph 64);
(b)plus any actuarial gains (less any actuarial losses) not recognised because of
the treatment set out in paragraphs 92 and 93;
©minus any past service cost not yet recognised (see paragraph96);
(d)minus the fair value at the balance sheet date of plan assets (ifany) out of
which the obligations are to be settled directly (
- kamranACA - 09-12-2007
Dear Noman,
I appreciate thi query. It' technical one.
Let me to have some time to reply in detail for concept clearance.
Regards,
Kamran.
- noman - 09-13-2007
Thanx for responding.....i really am appreciative and surprised at the same time that someone will is willing to take pain to help out others...
- noman - 09-16-2007
anybody?
- kamranACA - 09-17-2007
Noman,
Actually your query related to a complex standard which has also been revised recently. I read it some three years back and need a fresh look on it. Since I could not have sorted out enough time to go through its text, I could not post explanation.
Hope I will do it very soon.
Regards,
Kamran.
- noman - 09-19-2007
ok..no pressure...ha hah...
looking forward.....i guess only you are one here who can advise me........
- Moon - 10-05-2007
AOA
Please note that "cumulative unrecognised net actuarial losses and past service cost" is also a liability on the other hand and standard is comparing assets with the liability.
This answer is limited to your question, honestly i do not know why and how the standard has set this rule.