Remeasurements

Learning objectives

• Identify the three components of remeasurements.L2
• Calculate the return on plan assets excluding net interest and the remeasurement of the obligation from the data of a case.L3

Normative references

• IAS 19 §127Remeasurements of the net defined benefit liability (asset) comprise actuarial gains and losses, the return on plan assets excluding amounts included in net interest, and any change in the effect of the asset ceiling excluding amounts included in net interest (further detail in paras. 128 to 130).

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

4 questions

• Which items are part of the remeasurements of the net defined benefit liability (asset)? More than one answer is possible.L2
• The plan assets of Quirel SA had a fair value of {assets_open} at the start of the year. The discount rate at the start of the year is {rate} (case data). The actual return on assets for the year amounts to {actual_return}. No contribution or benefit was paid during the year. Calculate the interest income included in net interest, then the remeasurement of plan assets to recognise in other comprehensive income.L3
• At the reporting date, the fall in the discount rate causes an actuarial loss of {actuarial_loss} on the obligation of the plan of Lorvel SA, partly offset by a return on assets exceeding by {excess_return} the interest income included in net interest. The asset ceiling is not relevant. Post the entry for the net remeasurement of the net liability.L3
• On 1 April, before measuring the past service cost of a plan amendment, Vernier SA remeasures its net liability using current assumptions and fair value. The remeasurement shows an increase in the net liability of {remeasurement}, due to the fall in the discount rate since the last reporting date. Post the entry for this prior remeasurement.L3