CERTYNEX IFRS ACADEMY

The plan of Belmar SA shows a surplus of 800,000. The plan rules give Belmar an unconditional right to obtain a refund of the surplus when the plan is settled, although that refund cannot be realised today. Management states that it has no intention of recovering the surplus (case facts). Which conclusion on the asset ceiling is correct?

The asset ceiling is nil, because management does not intend to recover the surplus, so the net asset recognised must be reduced to zero.

The asset ceiling is nil as long as the refund cannot be realised immediately: a right exercisable on settlement of the plan, and not before, does not count towards the asset ceiling.

The refund is an available economic benefit, because Belmar has an unconditional right to realise it when the plan is settled; management's intention has no effect.

The asset ceiling adds the refund on settlement of the plan to the reductions in contributions until that settlement, each measured in full.