Learn about the new Section , issued by the Accounting Standards Board in September to replace Section Employee Future Benefits, which will replace Section in Part II of the CICA Handbook. The final version is consistent with the Exposure. Does anyone have an example similar to the illustrative examples of that actually use immediate recognition? The examples continue to.
|Published (Last):||11 March 2018|
|PDF File Size:||14.14 Mb|
|ePub File Size:||20.63 Mb|
|Price:||Free* [*Free Regsitration Required]|
As expected, there are few changes of any significance. This note explains a specific requirement that was changed in the final standard, affecting the text material in Chapter 23, and describes areas where the final document provides for additional information or clarification. This does not change the calculations in Chapter 20 because fair value and market-related value were assumed to be equal.
Section includes more detail and discussion on entities with two or more plans, not discussed in Chapter EARSL, or the expected average remaining service life of the employee group is no longer used, nor is it a defined term.
The impact on the cash flow statements presented in Chapter 23 and the solutions material provided with the text is limited to the treatment of dividends paid. New Section permits either prospective or retroactive treatment for the new recommendations, but requires that the same basis be applied by a company to all benefit plans for which a change in accounting is required. The nature and effect of each significant non-routine event occurring during the period such as a plan amendment, curtailment or settlement, or business combination or divestiture.
The unamortized amounts remaining, separately disclosing the unamortized past service costs, the unamortized net cuca gain or loss, and the unamortized transitional obligation or asset, as ccia as the amount of amortization for the period for each. Based on risk and return criteria, we must move forward. Many intermediate accounting students are one to two years from graduation Welcome to the Author Corner.
Transitional changes were not addressed in Chapter In Section as before, fair value is used to determine the plan surplus or deficit.
Section , Employee future benefits: September update: Financial reporting alert
Not effective until the year ? The climate in the existing Accounting Standards Board is to eliminate major differences between the Canadian and FASB standards wherever there is not a convincing reason for a difference.
The release of new CICA Handbook Sectionsent to subscribers in March,significantly changes the accounting for and reporting of employee future benefits in Canada. The nature and effect of each significant change during the period affecting the comparability of the expense reported, such as a change in the rate of employer contributions, a business combination or divestiture.
Section 3462, Employee future benefits: September 2013 update: Financial reporting alert
The CICA Exposure Draft and Chapter 23 both indicate that cash flows from interest and 346 received and paid should “be classified in a consistent manner from period to period as either operating, investing or financing activities. These are legitimate questions for professors to ask and ones that the authors had to deal with in determining some of the content of the 5th edition! Many large Canadian companies, particularly those with reporting requirements in the U.
Sectionunlike the Exposure Draft and old Sectionrecognizes the existence of employee contributions. Those that 33461 unrestricted time off ciac past service are classified as service-related future benefits, with the liability and expense accrued over the service period.
Link to previous articles: These requirements remove the choice of classification because choice reduces the comparability of financial statements.
Young Existing Standards or New? This does not materially change the coverage in Chapter Section clarifies that when the costs of special or contractual termination benefits, or gains or losses from settlements and curtailments relate directly to a discontinued operation or a disposal of a portion of a business segment, they should be included in the gain or loss from discontinued operations or the gain or loss on disposal of that portion of a business segment, as appropriate.
Unlike the Exposure Draftthe final standard provides for two levels of disclosure for defined benefit plans: A reconciliation of the beginning and ending balances of the accrued benefit obligation and the fair value of plan assets for the period. A change in the use of the terms “fair value” and “market-related value. The final standard includes a recommendation that interest earned on any unallocated plan surplus which might arise if a defined benefit plan is converted to a defined contribution plan should reduce the coca expense for the period.
Information about securities of the entity and related parties included in plan assets, and about transactions between the plan and the entity during the period. The final revisions to Handbook Section recommend the following: Cifa and interest paid and charged to retained earnings should be presented separately as cash flows used in financing activities.
The amount recognized ciica the balance sheet as an accrued benefit liability or asset, the expense for the period, the employer and employee contributions during the period, and the amount of benefits paid.
This section has been reorganized, now starting with a reminder about Section requirements to disclose the methods used when choices are provided.
Dividend payments are classified in this material as operating outflows, whereas revised Section requires that they be financing outflows. The inclusion of 34611 overdrafts as a part of cash and cash equivalents has been restricted to situations “when the bank balance fluctuates frequently from being positive to overdrawn” and in some circumstances, investments that meet the definition of cash equivalents may be classified instead as trading assets or investments.
The decision was made to incorporate the Income Tax Exposure Draft recommendations subsequently rewritten for minor changes between the ED and the final Handbook section in Chapter 19 and the Exposure Draft recommendations for Employees’ Future Benefits in Chapter The basic set includes:.
In calculating the expected return on plan assets and in determining the minimum clca of amortization under the corridor approach, either fair value or market-related value is acceptable. As it now stands, the new income tax standards are effective for fiscal years beginning inand the revisions to the pensions and new pronouncements for other benefits won’t be finalized by the Accounting Standards Vica until later in with a likely effective date of Here our authors will speak to you directly and provide you with updates on current accounting issues, changes in the discipline, teaching trends, tips on using the book.
Major assumptions underlying various measurements such as the discount rate, the expected long-term rate of return on plan assets, the rate of compensation increase, and information about the assumed health care cost trend rates for health care benefits. Still in the Exposure Draft stage? Is this what I should be teaching my students? Is this what we should be teaching now? This may differ depending 34661 the circumstance.