IASB proposes simplified accounting for certain defined benefit contributions

BY KEN TYSIAC

An International Accounting Standards Board (IASB) proposal published Monday is designed to simplify certain aspects of accounting for contributions to defined benefit plans under IAS 19, Employee Benefits.

The proposed amendments were created in response to concerns about the complexity of applying requirements related to accounting for contributions from employees and third parties to defined benefit plans.

A submission from the IFRS Interpretations Committee, which recommended that the IASB amend the standard, triggered the proposal. The proposal is designed to provide a straightforward alternative for accounting when the contributions payable in a particular period are linked solely to the employee’s service rendered during that period.

For example, the proposal would apply to accounting for employee contributions that are calculated according to a fixed percentage of salary.

Comments are requested by July 25.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.

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