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.

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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. A change in the use of the terms “fair value” and “market-related value.

Section 3462, Employee future benefits: September 2013 update: Financial reporting alert

The release of new CICA Handbook Sectionsent to subscribers in March,significantly changes the accounting for and reporting of employee future benefits in Canada. 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.

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.

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. These requirements remove the choice of classification because choice reduces the comparability of financial statements. Section includes more detail and discussion on entities with two or more plans, not discussed in Chapter 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 Based on risk and return criteria, we must move forward.

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. Many large Canadian companies, particularly those with reporting requirements in the U. In calculating the expected return on plan assets and in determining the minimum amount of amortization under the corridor approach, either fair value or market-related value is acceptable.

Dividends and interest paid and charged to retained earnings should be presented separately as cash flows used in financing activities.

Still in the Exposure Draft stage? In Section as before, fair value is used to determine the plan surplus or deficit. Young Existing Standards or New?


Section , Employee future benefits: September update: Financial reporting alert

Because companies have a choice, the guidance to disclose the policy adopted in determining the composition of cash and cash equivalents has been elevated to a required disclosure. As expected, there are few changes of any significance. The basic set includes:. Those that grant unrestricted time off for past service are classified as service-related future benefits, with the liability and cicx accrued over the service period.

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 cifa contribution plan should reduce the benefit expense for the period. While the Exposure Draft material related to pensions and other employee future benefits is not finalized, it is anticipated that in all major respects, the ED changes will be made to bring the standard in line with the U.

We should equip them ciac standards that are as current as possible. This does not materially change the coverage in Chapter Major assumptions underlying various measurements such as the discount rate, the expected long-term rate of return on plan assets, cuca rate of compensation increase, and information about the assumed health care cost trend rates for health care cca.

The unamortized amounts remaining, separately disclosing the unamortized past service costs, the unamortized net actuarial gain or loss, and the unamortized transitional obligation or asset, as well as the amount of amortization for the period for each.

CICA Immediate recognition – Actuarial Outpost

Is this what I should be teaching my students? The nature and effect of each 34461 non-routine event occurring during the period such as a plan amendment, curtailment or settlement, or business combination or divestiture.

A reconciliation of the beginning and ending balances of the accrued benefit obligation and the fair value of plan assets for the period. 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.

Dividend payments are classified in this material as operating outflows, whereas revised Section requires that they be financing outflows. Not effective until the year ? Welcome to the Author Corner. Unlike the Exposure Draftthe final standard provides for two levels of disclosure for defined benefit plans: EARSL, or the expected average remaining service life of the employee group is no longer used, nor is it a defined term. The amount recognized on 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.


Many intermediate accounting students are one to two years from graduation This does not change the calculations in Chapter 20 because fair value and market-related value were assumed to be equal. 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.

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!

The final standard looks different from the Exposure Draft — it is much better organized, is internally consistent, is easier to read, and has a useful glossary of defined terms before the appendices of examples. The inclusion of bank 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.

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 Board until later in with a likely effective date of Those that require research or public service to be performed to benefit the entity during the sabbatical period do not require accrual.

More discussion about the treatment of sabbaticals. It is effective for fiscal years beginning on or after January 1,however, earlier adoption is being encouraged.

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 final revisions to Handbook Section recommend the following: While the Exposure Draft also required the separate disclosure of cash flows associated with extraordinary items classified as operating, investing or financing as appropriate, 3416 final Handbook section further specifies that they must be “presented on a before tax basis.

Additional information or clarification provided Finalized Section goes into more detail than the Exposure Draft in coca discussion of cash and cash equivalents.