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ACCA Strategic Professional · Strategic Business Reporting (International) · Employee benefits

Under IAS 19 Employee Benefits, which of the following components of defined benefit cost is recognised in other comprehensive income and is NOT subsequently reclassified to profit or loss?

Remeasurements of the net defined benefit liability or asset are recognised in other comprehensive income and never reclassified to profit or loss. Service cost, past service cost and net interest stay in profit or loss under IAS 19.

  1. ACurrent service cost
  2. BNet interest on the net defined benefit liability
  3. CPast service cost arising from a plan amendment
  4. DRemeasurements, including actuarial gains and losses and the return on plan assets excluding amounts in net interestCorrect

Explanation

IAS 19 requires remeasurements (actuarial gains and losses, return on plan assets excluding net interest, and asset ceiling changes) to go to OCI, with no later reclassification to profit or loss. Current service cost, net interest and past service cost are all recognised in profit or loss.

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