| This summary of recently issued Accounting Standards Board (AcSB) pronouncements
has been prepared for information purposes only. Reference should be made to official Handbook material for
the text of final AcSB pronouncements. |
Status: Amendments to disclosure requirements issued. Background Information and
Basis for Conclusions document, and web-based presentation, now available. Also see
Implementation Guides, Employee Future Benefits,
for other information on employee future benefits (updated December 2004).
The AcSB issued amendments to improve and expand the disclosure requirements in
Section 3461, Employee Future Benefits, in March
2004, after completing its discussion of issues raised in comments received on the October 2003 Exposure
Draft, “Employee Future Benefits — Additional Disclosures.” The amendments do not change any
recognition or measurement requirements currently in the Section. Also, the AcSB issued a Background
Information and Basis for Conclusions document explaining the rationale for its decisions in April
2004.
Clarifications and Modifications Issued September 2004
Revisions released in September 2004 clarified that the disclosure requirement in Interim Financial Statements, paragraph 1751.14(k), pertains to
the "total amount of defined benefit cost" recognized, as determined by Employee Future Benefits, paragraph 3461.070. This release
also modified Section 3461, Employee Future Benefits, Example 2 — Disclosures, to improve its clarity.
CAmagazine Article
The June-July 2004 issue of CAmagazine contains an article, “Promises enlightened — new disclosure
requirements for pensions and other employee future benefits address transparency concerns,” that
discusses the enhanced disclosure requirements of Section 3461.
Highlights of Improved Disclosure Requirements
The annual disclosure requirements for defined benefit plans have been amended
to include:
- clarification on the accounting policy disclosures that should be made;
- a description of the type of plans;
- the date used to measure the plan assets and the benefit obligations;
- the effective date of the last (as well as the next required) actuarial valuation for
funding purposes;
- the components of costs recognized (in addition to the total) showing separately the
costs incurred for the period and the accounting adjustments to allocate costs to different periods so as to
recognize the long-term nature of employee future benefits;
- the balance sheet classification of the accrued benefit asset or
liability;
- a reconciliation of the accrued benefit obligation to the balance sheet asset or
liability;
- the actual allocation of plan assets by major asset category;
- separate disclosure of the discount rate used to determine the net benefit cost and
that used to determine the accrued benefit obligation; and
- the effects of a one-percentage-point increase and decrease in the assumed health care
cost trend rates.
Disclosure of the total cash amount initially recognized in the period as paid or
payable for that period for employee future benefits has been added to the requirements.
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Relief from certain disclosures is provided for entities other than public enterprises, co-operative
organizations, deposit-taking institutions and life insurance enterprises.
The amended disclosure requirements are effective for fiscal years ending on or after June 30, 2004. Earlier
application is encouraged.
Web-Based Presentation
A web-based presentation is available that
summarizes and highlights the disclosure requirements of Section 3461.
Staff support: Nancy Estey,
CA
Phone no.: +1 (416) 204-3271
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