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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Major assumptions underlying various measurements such as the discount rate, the expected long-term rate of return cicq plan assets, the rate of compensation increase, and information about the assumed health care cost trend rates for health care benefits. In Section as before, fair value is used to determine the plan surplus or deficit. Unlike the Exposure Draftthe final standard provides for two levels of cicaa for defined benefit plans: Transitional changes were not addressed in Chapter Welcome to the Author Corner.
The climate in the existing Accounting Standards Board is to eliminate 361 differences between the Canadian and FASB standards wherever there is not a convincing reason for a difference.
Many intermediate accounting students are one to two years from graduation While the Exposure Draft also required the separate 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.
This section has been reorganized, now starting with a reminder cicq Section requirements to disclose the methods used when choices are provided. This may differ depending on the circumstance. We should equip them with standards that are as current as possible.
Information about securities of the entity and related cca included in plan assets, and about transactions between the plan and the entity during the period.
Section 3462, Employee future benefits: September 2013 update: Financial reporting alert
The amount recognized on the balance sheet as an accrued benefit liability or asset, the expense for the period, cics employer and employee contributions during the period, and the amount of benefits paid. The CICA Exposure Draft and Chapter 23 both indicate that cash flows from interest and dividends received and paid should “be classified in a consistent manner from period to period as either operating, investing or financing activities.
This does not change the calculations in Chapter 20 because fair value and market-related value were assumed to be equal. 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. Those that require research or public service to be performed to benefit the entity during the sabbatical period do not require accrual. Still in the Exposure Draft stage?
Is this what I should be teaching my students? This does not materially change the coverage in Chapter Not effective until the year ?
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.
CICA Immediate recognition – Actuarial Outpost
A reconciliation of the beginning and ending balances of the accrued benefit obligation and the fair value of plan assets for the period. The decision was made to incorporate the Income Tax Exposure Draft 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 total plan obligation, the fair value of plan assets, and the resulting surplus or deficit.
The release of new CICA Handbook Sectionsent to subscribers in March,significantly changes the accounting for and reporting of employee future benefits in Canada. Section includes more detail and discussion on entities with two or more plans, not discussed in Chapter Based on risk and 33461 criteria, we must move forward.
More discussion about the treatment of sabbaticals. New Section permits either prospective or retroactive treatment for the new recommendations, but requires that the same civa be applied by a company to all benefit plans for which a change in accounting is required.
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.
Young Existing Standards or New? The nature and effect 4361 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 inclusion of bank overdrafts as a part of cash and cash equivalents has been restricted ckca 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.
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.
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.
Dividends and interest paid and charged to retained earnings should be presented separately as cash flows used in financing activities. As expected, there are few changes of any significance. 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. It is effective for fiscal years beginning on or after January 1,however, earlier adoption is being encouraged. Securities and loans “held for trading purposes,” terminology based originally on U.
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.
Section , Employee future benefits: September update: Financial reporting alert
Sectionunlike the Exposure Draft and old Sectionrecognizes the existence of employee contributions. 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.
Additional information or clarification provided Finalized Section goes into more detail than the Exposure Draft in its discussion of cash and cash equivalents. Many large Canadian companies, particularly those with reporting requirements in the U.
EARSL, or the expected average remaining service life of the employee group is no longer used, nor is it a defined term. Is this what we should be teaching now? These requirements remove the choice of classification because choice reduces the comparability of financial statements.