IASB scraps IAS19 amendment

The International Accounting Standards Board has voted to scrap plans to alter the way IAS19, Employee Benefits discount rates are calculated in countries where there is no deep corporate bond market.

These rates are used by companies to calculate pension liabilities when reporting under International Financial Reporting Standards.

In August 2009, the IASB issued a proposed amendment to IAS19 (Exposure Draft Discount Rate for Employee benefits).

In advance of the meeting, IASB technical staff produced an analysis of the responses and recommended that the change should not go ahead.

The IASB staff documents reported that the 100 responses received were polarised, with most from the Asia-Pacific region and emerging markets against the change. They added that ‘there are more practical problems in some jurisdictions than first envisaged’.

Actuarial consultant Lane Clark & Peacock was one of the respondents to the public consultation. Colin Haines, partner at LCP, said: ‘The IASB appears to have taken heed of the comments made by LCP and the many other respondents from around the world.

‘The changes could have had a big impact in many countries, and it is essential that any amendment to IAS19 is workable around the world. As it happens, the proposed sticking plaster had a number of holes.’