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

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.
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