International Financial Reporting Standards_guide.pdf

Chapter 37 Accounting and Reporting by Retirement Benefit Plans (IAS 26) 409
37.4.4 Actuarial valuations are normally obtained every three years. The present value of
the expected payments by a defined benefit plan can be calculated and reported using either
current salary levels or projected salary levels up to the time of the participants’ retirement.
37.4.5 Retirement benefit plan investments should be carried at fair value. In the case of
marketable securities, fair value is market value. If the plan holds investments for which an
estimate of fair value is not possible, the financial statements should disclose why fair value
is not used.
37.4.6 The financial statements should explain the relationship between the actuarial present
value of the promised retirement benefits and the net assets available for benefits, as well
as the policy for the funding of the promised benefits.
37.5 PRESENTATION AND DISCLOSURE
37.5.1 A description of the plan is required, including information such as the names of the
employers and the employee groups covered, number of participants receiving benefits, type
of plan, and other details.
37.5.2 Policies to be disclosed include:
■ significant accounting policies;
■ investment policies; and
■ the funding policy.
37.5.3 The statement of net assets should be made available for benefits showing the
amount of assets available to pay retirement benefits that are expected to become payable in
future. The statement should include:
■ assets at year-end, suitably classified;
■ the basis of valuation of assets;
■ a note stating that an estimate of the fair value of plan investments is not possible, if
any plan investments being held cannot be valued at fair market price;
■ details of any single investment exceeding either 5 percent of net assets available for
benefits or 5 percent of any class or type of security;
■ details of any investment in the employer’s securities (in the case of an employersponsored
plan); and
■ liabilities other than the actuarial present value of promised retirement benefits.
37.5.4 A statement of changes in net assets should be made available for benefits, including:
■ investment income;
■ employer contributions;
■ employee contributions;
■ other income;
■ benefits paid or payable (analyzed per category of benefit);
■ administrative expenses;
■ other expenses;
■ taxes on plan income;
■ profits and losses on disposal of investments and changes in value of investments; and
■ transfers from and to other plans.