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IAS 19

  • 04-07-2012 11:56am
    #1
    jojo1989
    Closed Accounts Posts: 17 ✭


    Hey guys,

    Does anyone have any insight into why Other comprehensive Income has been so popular with Irish companies when it comes to accounting for actuarial gains/losses on defined benefit plans.
    The other 2 options were the 10% corridor approach and recognising the gains/losses immediately in the P&L?

    Thanks


Comments

  • #2
    SBWife
    Registered Users, Registered Users 2 Posts: 1,287 ✭✭✭SBWife


    eircom used the corridor approach initially, recognising immediately against reserves was the choice taken by most of the listed PLCs who had the reserves to do so.


  • #3
    TiGeR KiNgS
    Registered Users, Registered Users 2 Posts: 1,435 ✭✭✭TiGeR KiNgS


    jojo1989 wrote: »
    Hey guys,

    Does anyone have any insight into why Other comprehensive Income has been so popular with Irish companies when it comes to accounting for actuarial gains/losses on defined benefit plans.
    The other 2 options were the 10% corridor approach and recognising the gains/losses immediately in the P&L?

    Thanks

    Recognising immediately increases the volatility of the income statement hence it is unattractive.

    10% corridor approach is not always allowed due to certain criteria plus it is quite complicated to account for.

    Also 10% corridor is NOT allowed in local GAAP.
    I even think the Corridor approach is on the Chopping list for IFRS because it is too lenient and reduces comparability of F/S's.



    Hence Other Comp is preferred.


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