When people think about pension accounting under IFRS Accounting Standards, they generally think about IAS 19 Employee Benefits. IAS 19 governs how employers should account for pensions. They often forget that a different standard, IAS 26 Accounting and Reporting by Retirement Benefit Plans, governs accounting by pension plans. In my view, the IASB should withdraw… Continue reading Time to retire IAS 26
Tag: Standard setting
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
How IASB members use comment letters
John Hughes runs an excellent blog on Accounting and IFRS Standards. In a recent post Language barriers and the IASB, or: please read the letter that I wrote! | John Hughes IFRS Blog (disclosurehub.org), John Hughes commented on my post Language Barriers to commenting on IASB proposals – Accounting Miscellany I need to pick up… Continue reading How IASB members use comment letters
Does it matter that companies don’t consolidate pension funds?
Some people wonder why companies present pension liabilities net of the related plan assets. They suggest that instead companies should consolidate their pension plans. People making that suggestion think it would lead to companies presenting pension liabilities (gross) separately from the plan assets. This post explains why introducing a requirement to consolidate pension plans would… Continue reading Does it matter that companies don’t consolidate pension funds?
Myths about deferred tax
There are many myths about what deferred tax is. As a result, many companies do not understand what information about deferred tax can tell investors. Thus, companies typically present that information in a technical way that investors find difficult to understand. Consequently, most investors dismiss that information as an uninteresting technicality and they ignore it.… Continue reading Myths about deferred tax
Language Barriers to commenting on IASB proposals
A recent paper looked at whether language barriers deter people from responding to IASB exposure drafts. It also discussed whether the IASB pays too little attention to comment letters from countries where the main language is very different from English. The paper “No Comment”: Language Barriers and the IASB’s Comment Letter Process, by Eduardo Flores,… Continue reading Language Barriers to commenting on IASB proposals
Finding out what users need
To set good accounting standards, standard-setters need to understand deeply how users of financial statements use and process financial information. One very useful report on this topic area was an academic literature review The use of information by capital providers produced in 2013, by a team of 6 academics: Stefano Cascino, Mark Clatworthy, Beatriz García… Continue reading Finding out what users need
Recognition
When the IASB developed the 2018 version of its Conceptual Framework for Financial Statements (2018), it created a set of principles that it believed would provide a more coherent base for its future decisions on recognition. The post summarises how those principles differ from the recognition criteria contained in the previous (2010) version of the… Continue reading Recognition
Help for unpacking the objective of financial reporting
Paragraphs 1.2-1.4 of the IASB’s Conceptual Framework for Financial Reporting are written so densely that some people do not succeed in unpacking what they say. To make unpacking the meaning of those paragraphs easier, the IASB staff recommended in 2017 that the IASB should add a flowchart to the Conceptual Framework. This post summarises the… Continue reading Help for unpacking the objective of financial reporting