The International Public Sector Accounting Standards Board® (IPSASB®) published Exposure Draft (ED) 59, Amendments to IPSAS 25, Employee Benefits.

A key part of the IPSASB’s strategy to develop high-quality public sector financial reporting standards is to maintain existing IPSASs. IPSAS 25 is based on International Accounting Standard (IAS) 19, Employee Benefits, which has subsequently been revised. The main changes that the IPSASB has proposed to IPSAS™ 25, so that convergence with IAS 19 is maintained to the extent appropriate, are:

  • Remove an option that allows an entity to defer the recognition of changes in the net defined benefit liability (the “corridor approach”);
  • Introduce the net interest approach for defined benefit plans;
  • Amend certain disclosure requirements for defined benefit plans and multi-employer plans; and
  • Simplify the requirements for contributions from employees or third parties to a defined benefit plan when those contributions are applied to a simple contributory plan that is linked to service.

“The proposals in this Exposure Draft aim to ensure that financial statements provide faithfully representative and relevant information about employee benefits, particularly defined benefit plans, while maintaining convergence with IFRS,” said IPSASB Chair Ian Carruthers. “These proposals address changes made to the underlying private sector standard since IPSAS 25 was originally issued. We look forward to hearing whether constituents support the changes to IPSAS 25 proposed in this Exposure Draft or have alternative views.”

To enhance understanding of these proposals, a marked-up version of IPSAS 25 reflecting the changes proposed in ED 59 is made available on the IPSASB website.