Wiley IFRS: Practical Implementation Guide and Workbook, 3rd Edition

Chapter 18

ACCOUNTING AND REPORTING BY RETIREMENT BENEFIT PLANS (IAS 26)

INTRODUCTION

IAS 26 deals with accounting and reporting to all participants of a retirement benefit plan as a group, and not with reports that might be made to individuals about their particular retirement benefits. The Standard sets out the form and content of the general-purpose financial reports of retirement benefit plans. The Standard applies to

• Defined contribution plans. Where benefits are determined by contributions to the plan together with investment earnings thereon.

• Defined benefit plans. Where benefits are determined by a formula based on employees’ earnings and/or years of service.

IAS 26 is sometimes confused with IAS 19, because both Standards address employee benefits. But there is a difference: While IAS 26 addresses the financial reporting considerations for the benefit plan itself, as the reporting entity, IAS 19 deals with employers’ accounting for the cost of such benefits as they are earned by the employees. These Standards are thus somewhat related, but there will not be any direct interrelationship between amounts reported in benefit plan financial statements and amounts reported under IAS 19 by employers.

SCOPE

IAS 26 addresses the accounting and reporting by retirement benefit plans. It does not mandate the presentation of an annual report for the plan. However, the terms of a retirement plan may require that the plan present an annual report; in some jurisdictions this ...