|
|
To summarise, EFRAG agrees with most proposals in the ED and with the objectives they are trying to achieve, but EFRAG is concerned about the proposed amendments to IAS 19 Employee Benefits.
EFRAG appreciates the responsiveness of the IASB in clarifying that it is the currency that the liabilities are denominated in that is important when determining the discount rate for post-employment benefit obligations rather than the country where they arise.
However, EFRAG notes a number of circumstances in which it is unclear if the proposals would result in an outcome that is consistent with the objectives the IASB is trying to achieve (e.g. jurisdictions adopting stronger currencies of other countries, jurisdictions that have a deep market of high quality corporate bonds sharing a single currency with other countries, and interactions between local requirements on post-employment benefit liabilities and on plan assets).
Therefore, EFRAG believes that the IASB – before finalising these proposals – should explain the rationale in selecting and using a discount rate to measure post-employment benefit obligations so that constituents can exercise judgement in applying the requirements in paragraph 83 of IAS 19.