About Post-employment Benefits

Analysts, preparers and other users of financial statements have voiced significant concerns about the IAS 19 accounting model over the years including:

• there are too many conceptual compromises;
• inconsistency with the Framework;
• the number of options for recognising gains and losses leading to lack of comparability; and
• the lack of clarity in the definitions of benefit promises.

As a result, in July 2006, the IASB implemented project on post-employment benefits. The project aims to make targeted improvements to IAS 19 Employee Benefits in a reasonably short time frame. The main improvements the Board is considering are:

• the removal of the options for deferred recognition of gains and losses in defined benefit plans and the presentation of the cost of defined benefit promises
• a new classification of benefit promises into contribution-based promises and defined benefit promises, with a new measurement attribute for contribution-based promises.

The Discussion Paper was published on 27 March 2008.

Memorandum of Understanding

This project forms part of the Memorandum of Understanding between the IASB and the FASB which sets out a Roadmap of Convergence between IFRSs and US GAAP 2006-2008.

Read the project history.