Australia

Details

  • Service: Audit, Financial Statement Audit, Financial Reporting & Accounting Standards, Accounting Advisory Services, International Financial Reporting Standards (IFRS)
  • Type: Regulatory update
  • Date: 29/11/2013

IFRS In the Headlines

IFRS In the Headlines
In the Headlines (formerly IFRS Briefing Sheets) provide a timely update on International Financial Reporting Standards (IFRS) developments.

Employee Contributions (2013/20) 

This edition of In the Headlines looks at amendments to IAS 19 Employee Benefits regarding accounting for contributions from employees or third parties meeting certain criteria to defined benefit pension schemes.
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How does the practical expedient work?


The amendments introduce a relief that will reduce the complexity and burden of accounting for certain contributions from employees or third parties.

 

Such contributions are eligible for the practical expedient if they are:

  • set out in the formal terms of the plan
  • linked to service and
  • independent of the number of years of service.

 

When contributions are eligible for the practical expedient, a company is permitted (but not required) to recognise them as a reduction of the service cost in the period in which the related service is rendered.