Wiley International Trends in Financial Reporting under IFRS: Including Comparisons with US GAAP, Chinese GAAP, and Indian GAAP

CHAPTER 30

ACCOUNTING AND REPORTING BY RETIREMENT BENEFIT PLANS (IAS 26)

1. OBJECTIVE

1.1 This Standard prescribes the accounting and reporting requirements for retirement benefit plans.

2. SYNOPSIS OF THE STANDARD

A summary of this Standard and the key terms it defines is presented next.

2.1 This Standard, which is applicable to retirement benefit plans, affects participants of the retirement benefit plan “as a group.” It does not address reports that might be made to individuals about their particular retirement benefits.

2.2 Retirement benefit plans are formal or informal arrangements based on which an entity provides benefits (termination benefits) for its employees on or after termination of service. These could take the form of annual pension payments or lump-sum payments. Such benefits, or the employer’s contributions toward them, should, however, be determinable or possible of estimation in advance of retirement, from the provisions of a document (in which case the retirement benefit plan is based on a formal arrangement) or from the entity’s practices (in which case the retirement benefit plan is referred to as based on an informal arrangement).

2.2.1 Retirement benefit plans can be either defined contribution plans or defined benefit plans.

2.2.2 Defined contribution plans are retirement benefit plans whereby retirement benefits to be paid to plan participants are determined by contributions to a fund together with investment earnings thereon. In other words, when the ...