FRSC Adopts Limited Amendment to Pension Accounting (06-10)

June 2010


The Financial Reporting Standards Council (FRSC) approved in its meeting in June 2010 the adoption of Amendment to IFRIC 14: Prepayments of a Minimum Funding Requirement, issued by the International Accounting Standards Board (IASB), as Amendment to Philippine Interpretation IFRIC–14.

IFRIC 14, which is itself an interpretation of IAS 19 (IAS 19–The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction), applies in the limited circumstances when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover those requirements. The amendment permits such an entity to treat the benefit of such an early payment as an asset.

The amendment is effective for annual periods beginning on or after January 1, 2011, with early adoption permitted.

The FRSC will submit the amendment to Philippine Interpretation IFRIC–14 to the Board of Accountancy for approval.