International Financial Reporting Standards_guide.pdf

CHAPTER 37
Accounting and Reporting
by Retirement Benefit Plans
(IAS 26)
37.1 OBJECTIVE
Retirement benefit plans hold assets in a fiduciary capacity on behalf of a number of employees.
The retirement benefit plans are usually referred to as pension schemes, or retirement
benefit schemes. The employees that have invested in the retirement benefit plans require
specific information in the financial statements of the retirement benefit plans in order to assess
the value of their investments
IAS 26 prescribes the information that a retirement benefit plan should include in its financial
statements for all participants. The standard specifically distinguishes between the information
requirements for defined benefit and defined contribution plans.
37.2 SCOPE OF THE STANDARD
This standard should be applied in retirement benefit plans’ financial statements that are
directed to all participants. The standard’s requirements apply to both defined contribution
and defined benefit plans that are:
■ funded by a separate trust or from general revenues;
■ managed by an insurance company;
■ sponsored by parties other than employers; and
■ documented by formal or informal agreements.
37.3 KEY CONCEPTS
37.3.1 Retirement benefit plans are arrangements whereby an entity provides benefits for
employees on or after termination of service (either in the form of an annual income or as a
lump sum) when such benefits, or the contributions towards them, can be determined or
estimated in advance of retirement from the provisions of a document or from the entity’s
practices.
37.3.2 Retirement benefit plans include both defined contribution plans and defined benefit
plans.
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