PAS 26 - Accounting and Reporting by Retirement Benefit Plans available for benefits, and the policy for the
available for benefits, and the policy for the funding of promised
Objective: To specify measurement and disclosure principles for the reports of benefits.
retirement benefit plans. DISCLOSURE
IT IS THE STANDARD FOR THE PREPARATION OF GENERAL-PURPOSE Statement of net assets available for benefit, showing: [IAS 26.35(a)]
FINANCIAL STATEMENTS OR FINANCIAL REPORTS OF assets at the end of the period
RETIREMENT BENEFIT PLANS WHICH MAY BE A: basis of valuation
1. DEFINED CONTRIBUTION PLAN details of any single investment exceeding 5% of net assets or 5% of any
2. DEFINED BENEFIT PLAN category of investment
Definition of terms: details of investment in the employer
1. Retirement Benefit - An arrangement by which an entity provides benefits liabilities other than the actuarial present value of plan benefits
(annual income or lump sum) to employees after they terminate from service. Statement of changes in net assets available for benefits, showing: [IAS 26.35(b)]
2. Defined contribution plan - A retirement benefit plan by which benefits to employer contributions
employees are based on the amount of funds contributed to the plan plus investment
employee contributions
earnings thereon.
investment income
3. Defined benefit plan - A retirement benefit plan by which employees receive
other income
benefits based on a formula usually based on employee earnings or year of service.
4. Funding – transfer of assets to separate entity (known as the fund) for future benefits paid
payment of benefits. administrative expenses
5. Net assets available for benefits – assets less liabilities of the plan, excluding other expenses
actuarial present value of promised retirement benefits (liability income taxes
6. Actuarial PV of promised benefits profit or loss on disposal of investments
REPORT OF A DEFINED CONTRIBUTION PLAN changes in fair value of investments
The report of a defined contribution plan should contain: transfers to/from other plans
a statement of net assets available for benefits and; Description of funding policy [IAS 26.35(c)]
Plan investments shall be carried at fair value. If fair values Other details about the plan [IAS 26.36]
cannot be estimated for certain retirement benefit plan Summary of significant accounting policies [IAS 26.34(b)]
investments, disclosure should be made of the reason why fair Description of the plan and of the effect of any changes in the plan during the
value is not used. period [IAS 26.34(c)]
a description of the funding policy. Disclosures for defined benefit plans: [IAS 26.35(d) and (e)]
REPORT OF A DEFINED BENEFIT PLAN actuarial present value of promised benefit obligations
The report of a defined benefit plan should contain either: description of actuarial assumptions
a statement that shows the net assets available for benefits, the actuarial description of the method used to calculate the actuarial present value of
present value of promised retirement benefits (distinguishing between promised benefit obligations
vested benefits and non-vested benefits) and the resulting excess or deficit;
or
a statement of net assets available for benefits, including either a note
disclosing the actuarial present value of promised retirement benefits
(distinguishing between vested benefits and non-vested benefits) or a
reference to this information in an accompanying actuarial report.
The actuarial present value of promised retirement benefits
should be based on the benefits promised under the terms of the
plan on service rendered to date, using either current salary
levels or projected salary levels, with disclosure of the basis
used.
The report should explain the relationship between the actuarial
present value of promised retirement benefits and the net assets
