Comparison between U.S. GAAP and International ... - Grant Thornton

More documents

Recommendations

Info

Comparison between U.S. GAAP and International Financial Reporting Standards 84 IFRS Curtailments and settlements Plan curtailment or settlement gains or losses shall be recognised when the curtailment or settlement occurs. Plan curtailment or settlement gains or losses include the following (IAS 19.109): • Any resulting changes in the present value of the defined benefit obligation • Any resulting change in the fair value of plan assets • Any related actuarial gains and losses and past service cost that had not been previously recognised U.S. GAAP Curtailments and settlements • Curtailment – the prior service cost or credit included in accumulated other comprehensive income associated with years of service no longer expected to be rendered as the result of a curtailment is a loss or gain. In addition, the projected benefit obligation may be decreased (a gain) or increased (a loss) by a curtailment. To the extent that a loss exceeds any net gain included in accumulated other comprehensive income (or the entire loss, if a net loss exists), it is a curtailment loss. A curtailment loss shall be recognized when the curtailment is probable of occurring and the effects can be reasonably estimated. To the extent that a gain exceeds any net loss included in accumulated other comprehensive income (or the entire gain, if a net gain exists), it is a curtailment gain. A curtailment gain shall be recognized when the related employees terminate or the plan suspension or amendment is adopted. Any transition asset remaining in accumulated other comprehensive income from initial application of ASC 715 is treated as a net gain and is combined with the net gain or loss arising thereafter (ASC 715- 30-35-92 through 35-94). Unlike IFRS, actuarial gains and losses are not recognized in a curtailment. • Settlement – settlement gains or losses shall be recognized when the settlement occurs (ASC 715-30- 35-79). The amount of the settlement gain or loss is the net gain or loss remaining in accumulated other comprehensive income plus any transition asset remaining in accumulated other comprehensive income from initial application of ASC 715 (ASC 715-30-35-79). Presentation Classification of pension assets and liabilities IAS 19 does not specify whether an entity should distinguish current and non-current portions of assets and liabilities arising from post-employment benefits (IAS 19.118). However, some entities make that distinction. Income statement There is no requirement to aggregate all the components of pension cost as a single item on the income statement (IAS 19.119). Classification of pension assets and liabilities If a classified balance sheet is presented, an employer shall classify the liability for an underfunded plan as a current liability, a noncurrent liability, or a combination of both. The current portion (determined on a plan-by-plan basis) is the amount by which the actuarial present value of benefits included in the benefit obligation payable in the next 12 months exceeds the fair value of plan assets. The asset for an overfunded plan shall be classified as a noncurrent asset (ASC 715-20-45-3). Income statement Components of pension cost are included in one amount on the income statement. © 2011 Grant Thornton LLP All rights reserved U.S. member firm of Grant Thornton International Ltd
Comparison between U.S. GAAP and International Financial Reporting Standards 85 IFRS U.S. GAAP Post-employment benefits – multi-employer and group plans Multi-employer plans An entity shall classify a multi-employer plan as a defined benefit plan or a defined contribution plan based on the terms of the plan. For a defined benefit plan, an entity shall account for its proportionate share of the defined benefit obligation, plan assets, and costs in a manner similar to other defined benefit plans (IAS 19.29). If information is not available to apply defined benefit accounting, an entity shall account for the plan as if it were a defined contribution plan and provide the disclosures listed in IAS 19.30. Group plans Defined benefit plans that share risks among various entities under common control are not multi-employer plans. An entity participating in such a plan (group plan) shall obtain information about the plan as a whole. If a group defined benefit plan has a contractual arrangement or stated policy that allocates the net defined benefit cost determined by IAS 19 to the participating entities, then each entity recognises the cost thus charged. If there is no such agreement or policy, each entity recognises a cost equal to its contribution payable for the period, except for the entity that is legally the sponsoring employer for the plan. The sponsoring employer of the plan shall recognise the net defined benefit cost in its financial statements (IAS 19.34 and 34A). Multi-employer plans Multi-employer plans shall be accounted for in a manner similar to a defined contribution plan by the individual companies (ASC 715-80-35-1). Some plans in which two or more unrelated employers contribute are not multiemployer plans. In substance, they are aggregations of single-employer plans that allow participating employers to pool their assets for investment purposes and to reduce administrative costs. ASC 715-30-35-70 discusses these plans. Group plans Group plans are not specifically addressed in U.S. GAAP. Group plans are accounted for as multi-employer or multiple employer plans depending on the individual facts and circumstances. In such circumstances related party disclosures are appropriate. See Section 10.6, “Related party disclosures.” Other long-term employee benefits Other long-term benefits are benefits other than termination or post-employment benefits that do not fall due within one year of the end of the period in which the employee renders the relevant services (IAS 19.7). IAS 19 applies a simplified method of the accounting for post-employment benefits to other long-term benefits. The main difference is that actuarial gains and losses and past service costs are recognised immediately (IAS 19.127). • Recognition and measurement – statement of financial position: an entity shall recognise a liability for the present value of the defined benefit obligation less the fair value of plan assets at the end of a reporting period (IAS 19.128) • Recognition and measurement – profit or loss: an entity shall recognise the net total of the following amounts in profit or loss except to the extent another IFRS requires or permits including it as part U.S. GAAP addresses some, but not all, other long-term benefits as defined in IAS 19. An employer shall recognize a liability for future benefits in accordance with ASC 715-60 if, in substance, the benefits constitute a postretirement plan. If the benefits are, in substance, individual deferred compensation contracts, ASC 715-10 applies. In general, the accounting for other long-term benefits is similar to that described above for short-term benefits. Unlike IFRS, U.S. GAAP does not include a comparable simplified version of the accounting for long-term benefits. © 2011 Grant Thornton LLP All rights reserved U.S. member firm of Grant Thornton International Ltd
Page 1 and 2:
Comparison between U.S. GAAP and In
Page 3 and 4:
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34: Comparison between U.S. GAAP and In
Page 83: Comparison between U.S. GAAP and In
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
show all

Comparison between U.S. GAAP and International ... - Grant Thornton

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?