The IASB (International Accounting Standards Board) is proposing to make changes to IFRIC 14 and IAS 19, the accounting standards which address the circumstances in which a pension scheme surplus can be recognised in a company's accounts.


Under these accounting standards a company can only account for a pension scheme surplus if there is an unconditional right to a refund of surplus under the scheme rules. The standards recognise that a right to a refund of surplus can arise in various circumstances, including assuming the gradual settlement of the scheme liabilities over time until all members have left the scheme. The proposed changes will provide that in such circumstances there is no unconditional right to a refund of surplus if other parties (e.g. the scheme trustees) can wind up the scheme without the entity's consent. The changes will also provide that the amount of surplus recognised as an asset on the basis of a future refund must not include amounts that other parties can use for other purposes that affect the benefits of scheme members, for example by enhancing scheme benefits without the entity's consent.

It is expected that the final form amendments will be issued in the second quarter of 2017, and that the amendments will apply to annual reporting periods beginning on or after 1 January 2019, with earlier application permitted.

Key contacts

Rachel Rawnsley

Rachel Rawnsley

Partner, Head of Pensions
United Kingdom

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Jade Murray

Jade Murray

Partner, Pensions
United Kingdom

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Catherine McAllister

Catherine McAllister

Partner, Pensions
United Kingdom

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Rachel Uttley

Rachel Uttley

Partner, Pensions
United Kingdom

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