IAS 19Workpapers (Step 4 of 5)

Workpaper template

Step 4 of 5

WorkpaperIAS 19 — Employee BenefitsL3 · L4

Plan event: prior remeasurement, past service cost, settlement result and net interest for the rest of the period

2 missions10 sections to document90 min

Prepared by: AI-assisted draft
Reviewed by: Not reviewed — human review required
Status: Published

Objective of the workpaper

Date the event, remeasure the net liability (asset) with the current assumptions and the current fair value of the assets, then determine the past service cost or the settlement result and the net interest for the rest of the period. The remeasured amounts are case data; the classification of the event remains a supported judgment.

10 sections · 25 blocks · 4 calculations · 2 entries

IAS 19 §99

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

2 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity

Plan amendment and settlement during the year: prior remeasurement, past service cost, settlement loss and net interest for the rest of the period

Case tasks documented here

Compute the past service cost of the amendment.
Record the past service cost.
Compute the settlement loss.
Record the settlement loss.
Compute the net interest for the rest of the year.

Facts and data

Inputs

Plan events: nature, date and populations concerned
TextRequired
ACCRUAL_RATE_RAISED_FOR_ACTIVE_MEMBERS_AND_LUMP_SUM_SETTLEMENT_FOR_RETIREES_BOTH_ON_1_JULY_20X6
Prior remeasurement: current assumptions and fair value of the assets at the event date
TextRequired
NET_LIABILITY_REMEASURED_AT_1_JULY_WITH_CURRENT_ASSUMPTIONS_AND_FAIR_VALUE_OF_THE_ASSETS
Obligation before the amendment, remeasured at the event date
Number
7,500,000
Obligation after the amendment, at the same date and with the same assumptions
Number
7,880,000
Obligation settled, remeasured at the settlement date
Number
900,000
Settlement price paid
Number
960,000
Net liability remeasured before the events
Number
1,300,000
Net liability after the events
Number
1,740,000
Effective rate for the rest of the period (remeasurement rate × fraction of the year, prepared by the case)
Number
2.75 %

Supporting documents

Evidence

Documents obtained and referenced (board decision, plan amendment, actuary report, settlement statement)
EvidenceRequired

Analysis: sequence of the steps

Analysis

IAS 19 §99

Points examined: sequence of recognition of the event
ChecklistRequired
- Net liability (asset) remeasured with current assumptions and fair value before any other amount
- Past service cost or settlement result determined next
- Effect of the asset ceiling taken into account only after the event
- Net interest for the rest of the period on the remeasured net liability, at the rate of the remeasurement

Calculations

IAS 19 §99

Past service cost (obligation after − obligation before, same date)
Calculation
380,000
Obligation after the amendment, at the same date and with the same assumptions ; − Obligation before the amendment, remeasured at the event date
Settlement loss (settlement price − obligation settled)
Calculation
60,000
Obligation settled, remeasured at the settlement date ; − Settlement price paid
Settlement gain (obligation settled − settlement price), nil in case of a loss
Calculation
0
Obligation settled, remeasured at the settlement date ; − Settlement price paid
Net interest for the rest of the period (remeasured net liability × effective rate)
Calculation
47,850
Net liability after the events ; Effective rate for the rest of the period (remeasurement rate × fraction of the year, prepared by the case)

Illustrative entries

Entries

Past service cost
Entry
Account Debit Credit
Past service cost expense 380,000
Net defined benefit liability 380,000
Settlement loss
Entry
Account Debit Credit
Settlement loss 60,000
Net defined benefit liability 60,000

Account	Debit	Credit
Past service cost expense	380,000
Net defined benefit liability		380,000

Account	Debit	Credit
Settlement loss	60,000
Net defined benefit liability		60,000

Judgment: classification of the events

Judgment

IAS 19 §99

Classification of the first event
JudgmentRequired
Plan amendment: past service cost
Plan amendment: past service cost / Plan curtailment / Plan settlement: settlement result / No plan event
Professional judgment: the classification follows from the facts (what changes in the rights of the members), not from the label given by the entity.
Rationale for the classification of the first event
Text
THE_ACCRUAL_RATE_IS_RAISED_FOR_SERVICE_ALREADY_RENDERED_WHICH_INCREASES_THE_OBLIGATION
Classification of the second event
JudgmentRequired
Plan settlement: settlement result
Plan amendment: past service cost / Plan curtailment / Plan settlement: settlement result / No plan event
Professional judgment: same approach for each event; the conclusion is supported.
Rationale for the classification of the second event
Text
THE_LUMP_SUM_PAID_BY_THE_FUND_DISCHARGES_THE_OBLIGATION_TO_THE_RETIREES

Information to prepare for the notes

Disclosure

IAS 19 §99

Information: plan event
Checklist
- Nature and date of the plan events
- Amounts recognised in profit or loss: past service and settlement
- Assumptions of the remeasurement used for the rest of the period

Effect on the financial statements

FS impact

Effect derived from the entries
Table

Conclusion

Conclusion: past service cost, settlement result and net interest for the rest of the period
ConclusionRequired

Normative references

References

Normative references cited in this workpaper
References

Checks and financial statement impact

Events recordedPass
Prior remeasurement recordedPass
Classification of the first event recordedPass
Classification of the second event recordedPass
Past service cost entry balancedPass
Settlement entry balancedPass
Net liability after = net liability before + past service cost + settlement lossPass

Assets: 0
Liabilities: 440,000
Profit or loss: -440,000
OCI: 0
Equity: -440,000

File and entity

Year-end employee benefits file: plan classification, short-term benefits, cost of a defined benefit plan, plan event and asset ceiling

Case tasks documented here

In which order to treat the events of the workshop plan, and how to classify them?
Compute the past service cost of the amendment.
Compute the settlement loss of the transfer.
Compute the net interest of the second half-year on the remeasured net liability.
Record the past service cost.
Record the settlement loss.

Facts and data

Inputs

Plan events: nature, date and populations concerned
TextRequired
IMPROVED_EARLY_RETIREMENT_TERMS_FOR_ACTIVE_MEMBERS_AND_TRANSFER_VALUES_PAID_BY_THE_FUND_TO_DEFERRED_MEMBERS_BOTH_ON_1_JULY_20X6
Prior remeasurement: current assumptions and fair value of the assets at the event date
TextRequired
NET_LIABILITY_REMEASURED_AT_1_JULY_WITH_CURRENT_ASSUMPTIONS_AND_FAIR_VALUE_OF_THE_ASSETS
Obligation before the amendment, remeasured at the event date
Number
2,900,000
Obligation after the amendment, at the same date and with the same assumptions
Number
3,086,000
Obligation settled, remeasured at the settlement date
Number
700,000
Settlement price paid
Number
735,000
Net liability remeasured before the events
Number
550,000
Net liability after the events
Number
771,000
Effective rate for the rest of the period (remeasurement rate × fraction of the year, prepared by the case)
Number
2.5 %

Supporting documents

Evidence

Documents obtained and referenced (board decision, plan amendment, actuary report, settlement statement)
EvidenceRequired

Analysis: sequence of the steps

Analysis

IAS 19 §99

Points examined: sequence of recognition of the event
ChecklistRequired
- Net liability (asset) remeasured with current assumptions and fair value before any other amount
- Past service cost or settlement result determined next
- Effect of the asset ceiling taken into account only after the event
- Net interest for the rest of the period on the remeasured net liability, at the rate of the remeasurement

Calculations

IAS 19 §99

Past service cost (obligation after − obligation before, same date)
Calculation
186,000
Obligation after the amendment, at the same date and with the same assumptions ; − Obligation before the amendment, remeasured at the event date
Settlement loss (settlement price − obligation settled)
Calculation
35,000
Obligation settled, remeasured at the settlement date ; − Settlement price paid
Settlement gain (obligation settled − settlement price), nil in case of a loss
Calculation
0
Obligation settled, remeasured at the settlement date ; − Settlement price paid
Net interest for the rest of the period (remeasured net liability × effective rate)
Calculation
19,275
Net liability after the events ; Effective rate for the rest of the period (remeasurement rate × fraction of the year, prepared by the case)

Illustrative entries

Entries

Past service cost
Entry
Account Debit Credit
Past service cost expense 186,000
Net defined benefit liability 186,000
Settlement loss
Entry
Account Debit Credit
Settlement loss 35,000
Net defined benefit liability 35,000

Account	Debit	Credit
Past service cost expense	186,000
Net defined benefit liability		186,000

Account	Debit	Credit
Settlement loss	35,000
Net defined benefit liability		35,000

Judgment: classification of the events

Judgment

IAS 19 §99

Classification of the first event
JudgmentRequired
Plan amendment: past service cost
Plan amendment: past service cost / Plan curtailment / Plan settlement: settlement result / No plan event
Professional judgment: the classification follows from the facts (what changes in the rights of the members), not from the label given by the entity.
Rationale for the classification of the first event
Text
THE_EARLY_RETIREMENT_TERMS_ARE_IMPROVED_FOR_SERVICE_ALREADY_RENDERED_WHICH_INCREASES_THE_OBLIGATION
Classification of the second event
JudgmentRequired
Plan settlement: settlement result
Plan amendment: past service cost / Plan curtailment / Plan settlement: settlement result / No plan event
Professional judgment: same approach for each event; the conclusion is supported.
Rationale for the classification of the second event
Text
THE_TRANSFER_VALUES_PAID_BY_THE_FUND_DISCHARGE_THE_OBLIGATION_TO_THE_DEFERRED_MEMBERS

Information to prepare for the notes

Disclosure

IAS 19 §99

Information: plan event
Checklist
- Nature and date of the plan events
- Amounts recognised in profit or loss: past service and settlement
- Assumptions of the remeasurement used for the rest of the period

Effect on the financial statements

FS impact

Effect derived from the entries
Table

Conclusion

Conclusion: past service cost, settlement result and net interest for the rest of the period
ConclusionRequired

Normative references

References

Normative references cited in this workpaper
References

Checks and financial statement impact

Events recordedPass
Prior remeasurement recordedPass
Classification of the first event recordedPass
Classification of the second event recordedPass
Past service cost entry balancedPass
Settlement entry balancedPass
Net liability after = net liability before + past service cost + settlement lossPass

Assets: 0
Liabilities: 221,000
Profit or loss: -221,000
OCI: 0
Equity: -221,000

Facts and data

Inputs

Plan events: nature, date and populations concerned
TextRequired
Prior remeasurement: current assumptions and fair value of the assets at the event date
TextRequired
Obligation before the amendment, remeasured at the event date
Number
Obligation after the amendment, at the same date and with the same assumptions
Number
Obligation settled, remeasured at the settlement date
Number
Settlement price paid
Number
Net liability remeasured before the events
Number
Net liability after the events
Number
Effective rate for the rest of the period (remeasurement rate × fraction of the year, prepared by the case)
Number

Supporting documents

Evidence

Documents obtained and referenced (board decision, plan amendment, actuary report, settlement statement)
EvidenceRequired

Analysis: sequence of the steps

Analysis

IAS 19 §99

Points examined: sequence of recognition of the event
ChecklistRequired
- Net liability (asset) remeasured with current assumptions and fair value before any other amount
- Past service cost or settlement result determined next
- Effect of the asset ceiling taken into account only after the event
- Net interest for the rest of the period on the remeasured net liability, at the rate of the remeasurement

Calculations

IAS 19 §99

Past service cost (obligation after − obligation before, same date)
Calculation
Obligation after the amendment, at the same date and with the same assumptions ; − Obligation before the amendment, remeasured at the event date
Settlement loss (settlement price − obligation settled)
Calculation
Obligation settled, remeasured at the settlement date ; − Settlement price paid
Settlement gain (obligation settled − settlement price), nil in case of a loss
Calculation
Obligation settled, remeasured at the settlement date ; − Settlement price paid
Net interest for the rest of the period (remeasured net liability × effective rate)
Calculation
Net liability after the events ; Effective rate for the rest of the period (remeasurement rate × fraction of the year, prepared by the case)

Illustrative entries

Entries

Past service cost
Entry
Debit Past service cost expense ← Past service cost (obligation after − obligation before, same date) ; Credit Net defined benefit liability ← Past service cost (obligation after − obligation before, same date)
Settlement loss
Entry
Debit Settlement loss ← Settlement loss (settlement price − obligation settled) ; Credit Net defined benefit liability ← Settlement loss (settlement price − obligation settled)

Judgment: classification of the events

Judgment

IAS 19 §99

Classification of the first event
JudgmentRequired
Plan amendment: past service cost / Plan curtailment / Plan settlement: settlement result / No plan event
Professional judgment: the classification follows from the facts (what changes in the rights of the members), not from the label given by the entity.
Rationale for the classification of the first event
Text
Classification of the second event
JudgmentRequired
Plan amendment: past service cost / Plan curtailment / Plan settlement: settlement result / No plan event
Professional judgment: same approach for each event; the conclusion is supported.
Rationale for the classification of the second event
Text

Information to prepare for the notes

Disclosure

IAS 19 §99

Information: plan event
Checklist
- Nature and date of the plan events
- Amounts recognised in profit or loss: past service and settlement
- Assumptions of the remeasurement used for the rest of the period

Effect on the financial statements

FS impact

Effect derived from the entries
Table

Conclusion

Conclusion: past service cost, settlement result and net interest for the rest of the period
ConclusionRequired

Normative references

References

Normative references cited in this workpaper
References