Pension accounting under IAS 19

IASC completed a major revision of its standard on pension costs in 1998, when it issued IAS 19 Employee Benefits. But although that was a major update to the Standard, the revision did not involve a thorough overhaul of every important aspect of the Standard. Scope limitations adopted by the IASC at the start of… Continue reading Pension accounting under IAS 19

Own credit risk

The topic of own credit risk generates perhaps more strongly held views than any other accounting topic. For example, in around 2011, the IASB was developing a discussion paper on insurance contracts. Some of us visited one of the largest insurers in the world. They knew almost nothing about the project. But they had heard… Continue reading Own credit risk

IASC’s project on discounting

The International Accounting Standards Committee (IASC) added to its work plan a project on discounting (or present value) in 1998. IASC was the predecessor of the International Accounting Standards Board (the IASB). When the IASB came into being in 2001 and took over from IASC, the IASB decided not to continue with the project. In… Continue reading IASC’s project on discounting

Discount rates for very long maturities

A common question about discount rates is how to estimate a discount rate for assets and liabilities with very long maturities. Such a discount rate contains a term premium that cannot be based on evidence and can never be back-tested. As a result, that term premium is not really an estimate, it is just a… Continue reading Discount rates for very long maturities