IAA to develop a model International Standard on IAS 19 Employee Benefits
The IAA is pleased to announce that it has approved a Statement of Intent to develop an International Standard of Actuarial Practice (ISAP) on IAS 19 Employee Benefits. IAS 19 Employees Benefits is an accounting standard that addresses the accounting requirements for employee benefits, including short-term, post-employment and termination benefits. The standard is based on the principle that the cost of providing employee benefits should be recognized during the period when the benefits are earned.
An ISAP is a model standard for national member associations and/or their actuarial standard-setting bodies to consider. The intention of a standard of actuarial practice is to promote a greater consistency of approach to actuarial practice in a given situation, so as to increase the confidence of clients and the public in the actuarial work product, but without unnecessarily constraining the exercise of actuarial judgment.
One of the IAA’s strategic objectives is to promote the development and issuance of actuarial standards in the jurisdictions of all Full Member Associations, and the global convergence of actuarial standards.
Actuaries in many jurisdictions with many different types of benefit plans will be providing actuarial services in connection with IAS 19. For this reason, an ISAP is the most effective means to facilitate convergence in actuarial practice within and across jurisdictions. The ISAP on IAS 19 is expected to:
- Provide guidance for actuaries providing actuarial services under IAS 19 to facilitate convergence in actuarial practice within and across jurisdictions,
- Increase public confidence in actuaries’ services under IAS 19,
- Increase Reporting Entities’ confidence in actuaries’ contributions to IFRS reporting of employee benefits,
- Promote the development of the Actuarial Profession, as Reporting Entities’ greater confidence leads them to expand their use of actuaries for IFRS reporting of employee benefits, and
- Demonstrate the IAA’s commitment to support the work of the International Accounting Standards Board (IASB) in achieving comparable financial reporting internationally (as envisaged by the MoU between the IAA and the IASB).
The approved Statement of Intent is available on the IAA website (www.actuaries.org) under publications . The proposed ISAP is being developed by the IAS 19 Task Force of the Actuarial Standards Committee of the IAA in compliance with the IAA’s due process for ISAPs.
This activity contributes to the development of model standards of practice as indicated within the IAA’s Strategic Objective 3. To learn more about the proposed ISAP, or to submit questions, please contact the Director of Technical Activities at the IAA Secretariat.