IASB mulls targeted project to tackle IAS 19 treatment of hybrid plans

September 29, 2020 0 Comments

first_imgThe International Accounting Standards Board (IASB) has tentatively signalled plans to launch a research project to investigate the chances of developing a fix for the ‘accounting mismatch’ problem produced by so-called hybrid pension plans.This effort will fall far short of a wholesale reconsideration of its employee benefits standard, International Accounting Standard, IAS 19.Instead, IASB members said they would prefer to put their efforts into developing an accounting model to address plans where the benefit promise varies with the level of returns on specified assets.Eric Steedman from consultants Willis Towers Watson welcomed the move. “This workstream makes no pretence of being a complete fix to problems the IASB first took up 12 years ago but has potential to mitigate one of the most troubling inconsistencies that can arise,” he said. Aon Hewitt consultant actuary Simon Robinson added: “Previous attempts such as IFRIC D9 have failed because they highlight that a fundamental review of IAS 19 would be required.“My initial take on this announcement is that it makes a certain amount of sense to make it quite a narrow scope change in this area. It seems like a pragmatic way to deal with a very specific issue.“I would guess it is aimed at countries like Switzerland rather than the UK, and might well just clarify that the typical Swiss approach used currently is a reasonable interpretation of the standard.”A total of nine board members supported the proposal to mount a limited scope research effort into pensions.A poll of board members showed no support for a broader look at pensions accounting issues.Staff will now approach the IASB’s IFRS Advisory Council for comments ahead of finalising their work plan.If the project goes ahead, the work could start in 2017, staff said.The staff recommended against any further research on other aspects of accounting for post-employment benefits.The decision comes in the wake of the board’s formal agenda consultation exercise.Driving the demand for action among constituents is the concern that numbers produced under IAS 19 are unreliable.Staff explained that actuaries have been qualifying their IAS 19 valuation reports on the basis that they believe the resultant values are grossly misleading.For example, the South African Institute of Chartered Accountants argued that IAS 19 produces bigger deficits than economically exist.IOSCO is concerned “recent developments in employee benefit promises do not fit well within the existing accounting requirements”.Board members, however, were muted in their support for the move.Mary Tokar said: “We should do nothing rather than pursue the alternative you identified. We have tried several times to have a surgical approach on only hybrid plans. We have not succeeded. We should just cut our losses.“As soon as we start talking about the accounting mismatch between [the] obligation and [the] discount rate, we’ll get people who are not in hybrid plans saying, ‘Well, we have an accounting mismatch, too’.”Her colleague Stephen Cooper added: “It would be completely unacceptable for us to do nothing on this. This has been a problem for so many years. [For] the jurisdictions it does affect, this really annoys them. It is a problem with IAS 19.“It is illogical to compound at one rate and discount at a different rate, and you get a stupid answer. I don’t think we can defend IAS 19 and say it is the right answer.”Cooper added: “I didn’t like this capped-return model when it was first suggested because it ignores the time value of the options. I accept it solves one problem, which is to get the cashflows consistent with the discount rate.“And it solves the problem of the liability’s being overstated at the moment as a result of that incorrect discount rate.”Separately, it emerged that staff have no plan to carry out a post-implementation review of the 2011 changes to IAS 19.Meanwhile, as to the board’s likely work on discount efforts, IASB director Peter Clark said: “A further question is whether we would do either a general project or … any targeted project.“Our general assumption is the board is unlikely to want to take on standard-setting projects at this stage solely on discount rates.”last_img read more

UW grapples NIU in Big Ten tune-up

September 17, 2020 0 Comments

first_imgThe No. 10 Wisconsin wrestling team will be on the road onceagain this weekend as it heads to Cedar Falls, Iowa, to compete against No. 23Northern Iowa Saturday.The dual will be the first of the season for the Panthers,while the Badgers come in with a 4-0 record. Still, keeping NIU’s ranking inmind, head coach Barry Davis knows not to take this weekend’s match lightly.”UNI’s got a good coach in Brad Penrith,” Davis said. “Hisguys will be ready. This will be a big match for them, down at UNI. We’ve justgot to be ready.”Wisconsin enters the dual with seven wrestlers ranked in thetop 20 nationally of their respective weight classes. Among the notables areNo. 3 Craig Henning at 157 pounds, No. 4 Dallas Herbst at 197 pounds and No. 11Kyle Massey, who wrestles in the heavyweight division.NorthernIowa has three ranked grapplers of its own, asC.J. Ettelson is ranked No. 10 at 141 pounds,Moza Fay is No. 5 at 165 pounds andAlex Dolly is No. 16 at 174 pounds.”The thing withNorthern Iowa is they always wrestle us tough,” Massey said. “We’re one oftheir featured matches every year. So they’re always coming out, raring to goand ready to bring their best game against us.”Wisconsin is comingoff an impressive showing last weekend at the Cliff Keen Invite in Las Vegas.The Badgers finished fifth out of 50 teams competing, scoring 107.5 teampoints. Three of the top five teams at the invite came from the Big Ten, withMichigan taking the title and Ohio State placing third. Herbst improved hisseason record to 13-0 while taking the individual title at 197 pounds. Henningand Massey also finished well, taking third in their respective weight classes.”I think I wrestledwell,” Herbst said of his first-place performance. “Friday, I wasn’t feelinggood. I wrestled well, but I was still feeling tight, not really lose like Icould have been. But going into Saturday I just felt really good. On the mat, Ifelt prepared and ready to be there.”This year will be the 36th meeting of the two teams.Wisconsin leads the overall series 19-16-1. Last year, the Panthers came intothe Field House expecting to win, only to leave empty handed with a 24-10 lossas the Badgers took seven of the 10 matches.Once the Badgers return home late Saturday night, they havea short turnaround as they head to Ohio State Monday for their Big Ten opener.Despite the fact the core of the Big Ten season is still a month and a halfaway, Massey knows that this team builds off the little successes that occuralong the way.”We had some prettysuccessful guys this weekend, but we always have kind of wrestled a little bitbetter when we’re heading into a dual meet,” Massey said.”It’s going to benice to kind of change pace back into our dual meet team and get back into theflow of building off of each other matches because that’s when we’re at ourbest.”last_img read more