Under the IASB’s Primary Financial Statements Project, one proposed change could see defined benefit (DB) plan sponsors no longer given a choice as to how they display net interest costs.
Speaking during a 21 June board meeting, project manager Rachel Knubley said: “In respect of the IAS 19 issue, what we are proposing to do would indeed result in a consequential amendment to remove the classification choice that people have at the moment.”
IAS 19 currently permits DB sponsors to choose how they present net-interest cost on the face of the company’s income statement.
The IASB is currently examining a staff proposal to require businesses to report an EBIT (earnings before finance income/expenses and tax) subtotal on income statements.
The issue forms part of the IASB’s “Better Communication” initiative to improve clarity in financial reporting.
The project could also mean that companies would have to separate out financing-related interest income from other types of interest income.
Any move would have an impact on pensions accounting. Since 2011, DB sponsors have been required to report a net-interest cost on income statements.
Meanwhile, it has emerged that the IASB will issue a discussion paper rather than a full exposure draft on its Primary Financial Statements Project.
At the moment, the board is still assessing how it could structure an EBIT line item rather than deciding whether it would be productive to include it in the income statement.
Full news
© IPE International Publishers Ltd.
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article