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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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. It is effective for fiscal years beginning on or after January 1,however, earlier adoption is being encouraged. This may differ depending on the circumstance.
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. This section has been reorganized, now starting with a reminder about Section requirements to disclose the methods used when choices are provided.
A reconciliation of the beginning and ending balances of the accrued benefit obligation and the fair value of plan assets for the period. The final revisions to Handbook Section recommend the following: Based on risk and return criteria, we must move forward. More discussion about the treatment of sabbaticals. 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!
This does not change the calculations in Chapter 20 because fair value and market-related value were assumed to be equal. Not effective until the year ? Unlike the Exposure Draftthe final standard provides for two levels of disclosure for defined benefit plans: Transitional changes were not addressed in Chapter The total plan obligation, the fair value of plan assets, and the resulting surplus or deficit.
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. 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.
Section 3462, Employee future benefits: September 2013 update: Financial reporting alert
Sectionunlike the Exposure Draft and old Sectionrecognizes the existence of employee contributions. 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 it now cicz, 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 grant unrestricted 346 off for past service are classified as service-related future benefits, with the liability and expense accrued over the service period.
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.
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.
Those that require research or public service to be performed to benefit the entity during the sabbatical period do not require accrual.
This does not materially change the coverage in Chapter Is this what we should be teaching now? The final standard includes ccica 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 benefit expense for the period.
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 cia Chapter While the Exposure Draft material ckca 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 ckca line with the U.
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 release of new CICA Handbook Sectionsent to subscribers in March,significantly changes the accounting for and reporting of employee future benefits in Canada.
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. One major difference exists between the Exposure Draft and new Section that affects Chapter 20 — recommendations relating to disclosure. Dividend payments are classified in this ciica as operating outflows, whereas revised Section requires that they be financing outflows.
The basic set includes:. A change in the use of the terms “fair value” and “market-related value.
Section includes more detail and discussion 361 entities with two or more plans, not discussed in Chapter 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.
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.
Section , Employee future benefits: September update: Financial reporting alert
These requirements remove the choice cida classification because choice reduces the comparability of financial statements. EARSL, or the expected average remaining service life of the employee group is no longer used, nor is it a defined term. We should equip them with standards that are as current as possible. Still in the Exposure Draft stage?
Many large Canadian companies, particularly those with reporting requirements in the U.