APPENDIX P
Pension Fund Valuation Guidance
INTERNATIONAL ACCOUNTING STANDARDS determine how companies report the value of their pension fund assets. The International Financial Reporting Standards (IFRS) encourage (and may soon require) companies to include on the company balance sheet the value of total future obligations regarding employees’ pension entitlements.
Before the end of 2004, under International Accounting Standard (IAS) 19, companies routinely amortized this obligation, spreading it out over time. Whenever an obligation would fall due (that is, whenever a retiree got a check), this obligation was recognized as a liability. Otherwise, it was not so recognized.
On December 16, 2004, however, the International Accounting Standards ...
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