Other comprehensive income without recycling

Learning objectives

• Explain that remeasurements recognised in other comprehensive income are never reclassified to profit or loss.L1
• Identify the only permitted movement: a transfer within equity.L2

Normative references

• IAS 19 §122Remeasurements recognised in other comprehensive income are not reclassified to profit or loss in a subsequent period; the entity may transfer those amounts within equity.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

2 questions

• Remeasurements of a defined benefit plan recognised in other comprehensive income are not reclassified to profit or loss in a later period, including when the plan is settled.L1
• Dorcel SA fully settles its defined benefit plan by transferring the obligations to an insurer. The cumulative remeasurements recognised so far in other comprehensive income are a loss of 1,240,000. The finance director proposes to reclassify that loss to profit or loss at the settlement date, so that the settlement result reflects the whole past of the plan (case facts). Write a short justification of the treatment of the cumulative remeasurements, distinguishing rule, case facts and conclusion.L2