CERTYNEX IFRS ACADEMY

A trainee summarises the treatment of the asset ceiling for a defined benefit plan in surplus. Which of his sentences is wrong?

The asset ceiling is the present value of the economic benefits available as refunds from the plan or reductions in future contributions.

The net asset recognised is the whole plan surplus; the asset ceiling applies only if management decides not to recover the surplus.

The net defined benefit asset is measured at the lower of the plan surplus and the asset ceiling.

The present value of the economic benefits that form the ceiling is calculated using the discount rate of the obligation in paragraph 83.