Video presentation – EFRAG’s discussion paper: Accounting for Pension Plans with an Asset-return Promise is still open for comments until 15 November
As Sapna Heeralall, EFRAG Technical Manager, explains in the video below, the discussion paper explores alternative accounting treatments for post-retirement employee benefits (pension plans) promising the higher of the return on plan assets and a minimum guaranteed return (referred to as an ‘asset-return promise’).
The discussion paper addresses pension plans that promises the higher of the return on the plan assets and a minimum guaranteed return.
The discussion paper considers the following three alternatives for accounting for the plans in the scope of the project:
a) a Capped Asset Return approach;
b) a Fair-Value Based approach; and
c) a Fulfilment Value approach.
The discussion paper is available here.