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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In Section as before, fair cicw is used to determine the plan surplus or deficit. Securities and loans “held for trading purposes,” terminology based originally on U.

CICA Immediate recognition – Actuarial Outpost

These requirements remove the choice of classification because choice reduces the comparability of financial statements. 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.

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.

Young Existing Standards or New? It is effective for fiscal years beginning on or after January 1,however, earlier adoption is being encouraged. While the Exposure Draft also required the ccia disclosure of cash flows associated with extraordinary items classified as operating, investing or financing as appropriate, the final Handbook section further specifies that they must be “presented on a before tax basis.

The total plan obligation, the fair value of plan assets, dica the resulting surplus or deficit.

Section , Employee future benefits: September update: Financial reporting alert

Link to previous articles: 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. This may differ depending on the circumstance. Sectionunlike the Exposure Draft and old Sectionrecognizes the existence of employee contributions.

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. Is this what I should be teaching my students? 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.


Additional information or clarification provided Finalized Section goes into more detail than the Exposure Draft in its discussion of cash and cash equivalents. Still in the Exposure Draft stage? Welcome to the Author Corner. Many intermediate accounting students are one to two years from graduation Based on risk and return criteria, we must move forward. This does not materially change the coverage in Chapter 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.

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. 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 Clca 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 in Chapter The nature and effect of each significant change during the period affecting the comparability of the expense reported, such as a change in the rate of employer contributions, a business combination or divestiture.

The final revisions to Handbook Section recommend the following: The CICA Exposure Draft and Chapter 23 both indicate that cash flows from interest and dividends received and paid should “be classified in a 3641 manner from period to period as either operating, investing or financing activities.

Section 3462, Employee future benefits: September 2013 update: Financial reporting alert

ckca The impact on the cash flow statements presented in Chapter 23 and the solutions material provided cics the text is limited to the treatment of dividends paid. Dividends and interest paid and charged to retained civa should be presented separately as cash flows used in financing activities.

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.


As expected, there are few changes of any significance. More discussion about the treatment of sabbaticals. Unlike the Exposure Draftthe final standard provides for two levels of disclosure for defined benefit plans: Those that require research or public service to be performed to benefit the entity during the sabbatical period 34661 not require accrual.

We should equip them with standards that are as current as possible. 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.

A change in the use of the terms “fair value” and “market-related value. Many large Canadian companies, particularly those with reporting requirements in the U. One major difference exists between the Exposure Draft and new Section that affects Chapter 20 — recommendations relating to disclosure.

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.

The release of cicw CICA Handbook Sectionsent to subscribers in March,significantly changes the accounting for and reporting of cic future benefits in Canada.

EARSL, or the expected average remaining service life of the employee group is no longer used, nor is it a defined term. The basic set includes:. 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 be made to bring the standard in line with the U.

Section clarifies that when the costs vica special or contractual termination benefits, or gains or losses from cuca 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.