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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This section has been reorganized, now starting with a reminder about Section requirements to disclose the methods used when choices are provided.
Section 3462, Employee future benefits: September 2013 update: Financial reporting alert
Dividend payments are classified in this material as operating outflows, whereas revised Section requires that they be financing outflows. 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.
These requirements remove the choice of classification because choice reduces the comparability of financial statements. 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.
Welcome to the Author Corner. Securities and loans “held for trading purposes,” terminology based originally on U. The CICA Exposure Draft and Chapter 23 34461 indicate that cash flows from interest and dividends received and paid should 34461 classified in a consistent manner from period to period as either operating, investing or financing activities.
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 benefit expense for the period. 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. Not effective until the year ? Is this what we should be teaching now? Is this what I should be teaching my students?
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 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 cicca 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 This does not materially change the coverage in Chapter 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 icca made to bring the standard in line with the U.
Based on risk and return criteria, we must move forward.
In Section as before, fair value is used to determine the plan surplus or deficit. Those that grant unrestricted time off for past service are classified as service-related future benefits, with the liability and expense accrued over the service 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.
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. Young Existing Standards or New?
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. 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.
We should equip them with standards that are as current as possible. A change in the use of the terms “fair value” and “market-related value.
CICA Immediate recognition – Actuarial Outpost
The total plan obligation, the fair value of plan assets, and the resulting surplus or deficit. A reconciliation of the beginning and ending balances of the accrued benefit obligation and the fair value of plan assets for the period.
Additional information or clarification provided Finalized Section goes into more detail than the Exposure Draft in its discussion of cash and cash equivalents.
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 basic ccica includes:.
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. Transitional changes were not addressed in Chapter 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. Link to previous articles: This does not change the calculations in Chapter 20 because fair value and market-related value were assumed to be equal.
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 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.
Still in the Exposure Draft stage? 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.
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. One major difference exists between the Exposure Draft and new Section that affects Chapter 20 — recommendations relating to disclosure.
Many intermediate accounting students are one to two years from graduation