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That guidance is set out in IFRIC 14, "The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction". It interprets the requirements of International Accounting Standard 19 (IAS 19), employee benefits. The issue is believed to be of particular relevance to plans in the UK. Summing up their approach to the issue, IFRS IC staff argued at a 13 May meeting that the committee should amend IFRIC 14 to clarify that a trustee’s "power to augment benefits, to wind up the plan or to buy annuities is not directly relevant to recognition of an asset".
Under discussion by the committee is whether a defined benefit (DB) plan sponsor can recognise a right to access a plan surplus as a balance-sheet asset in circumstances where trustees can restrict in some way the sponsor’s right to that asset.
The standard goes on to define the asset ceiling as "the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan". And paragraphs 11 and 12 of IFRIC 14 clarify that a refund is available if the sponsor has "an unconditional right" to a refund. Experts familiar with the issue noted that the problem had arisen because the IFRIC 14 deals with recognition of a refund rather than the measurement of the amount of refund to which an entity might ultimately be entitled.
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