IASB committee concedes defeat on contribution-based promises

first_imgThe International Accounting Standards Board’s interpretation’s committee has called a halt to efforts to come up with accounting guidance for companies with non-traditional defined benefit (DB) pension schemes.The plans – dubbed contribution-based promises, or ‘intermediate risk’ plans – have proved to be troublesome to account for under the projected unit credit model found in International Accounting Standard 19, Employee Benefits (IAS19).Since 2004, both the committee, known officially as the International Financial Reporting Standards Interpretations Committee, and the IASB have tried and failed to develop an appropriate accounting approach for this troublesome class of pension plan.The committee’s decision, which emerged during its 29 January meeting, means constituents must now wait for the IASB to add a pensions-accounting project to its work plan. Commenting on the news, Eric Steedman, a leading pensions consultant with Towers Watson, told IPE: “The Interpretations Committee has effectively said the issue is too big for them to solve expeditiously.“Unfortunately, for now at least, this leaves preparers with such plans to carry on ‘doing their best’ with a statement that does not really cater for their situation.”The IFRS IC’s predecessor, the International Financial Reporting Interpretations Committee, published the so-called IFRIC D9 approach for contribution-based promises in a consultation document back in 2004.The committee called a halt to that work, however, when, in 2006, the IASB launched its unsuccessful bid to develop a new accounting methodology to deal with intermediate-risk pensions, or contribution-based promises.But fresh life was breathed into that approach, when the IFRS IC decided to take another look at contribution-based promises accounting.Both D9, and the IASB’s contribution-based promises model, set out to address the accounting challenges that arise when IAS19’s projected unit credit measurement model and discounting approach is applied to non-traditional DB plans.One obstacle to good accounting that is often cited by critics of IAS19 is that the standard forces them to discount projected returns on a pool of equity assets using either a high-quality corporate bond or government bond discount rate.The mood around the committee table during the 29 January meeting was largely downbeat on the committee’s prospects for bringing the effort to a successful conclusion that preparers would welcome.Laurence Rivat, a senior audit partner with Deloitte in France, said she was unclear who would benefit from any guidance that the committee might come up with.Rivat reported that constituents had told her that any guidance that might emerge from the committee would not change what they “are currently doing”.She added: “What we really need is that the board take on a project to review fundamentally IAS19 to deal with those plans where there is risk-sharing between employees and employers.”Similarly, E&Y partner John O’Grady said: “I would be in favour of discontinuing this project because I don’t think we are able to control ourselves when it comes to scope. That has always been the problem with this.“We are trying to solve some fundamental problems with IAS19, which to me is a board project to sort out IAS19 to deal with the modern types of plans that are out there.”As for the long-term outlook for an IASB-level pensions project, IASB director Alan Teixeira said now might be a good time to accelerate the board’s apparent research project on pensions accounting.Speaking during a 16 September 2013 IASB meeting, Teixeira said the pensions research effort was “on the longer-term research plan” but had no staff allocated to it.He also noted that no standard setters had “expressed an interest in the project.”According to information posted on the IASB’s website, the board expects to hold a consultation on the shape of its future agenda in 2015.A feedback statement on the IASB’s 2011 agenda consultation bracket pensions accounting, share-based payments and income taxes together as longer-term priorities.last_img read more

Politico editor discusses objectivity

first_imgShushanik Minasian, a graduate student studying journalism, said she enjoyed learning about Politico’s values and their expectations for journalists. Politico editor Carrie Budoff Brown discussed the news outlet’s coverage of politics and stance on objectivity Tuesday. (Shaylee Navarro/Daily Trojan) Budoff Brown said that while journalists can have personal opinions on political issues,  they must remain objective to uphold their journalistic integrity. “We’re under a media microscope,” Budoff Brown said. “If one of us screws up, it looks like all of us screwed up.” “[Budoff Brown’s] hope is to foster an understanding of politics in the digital era,” Bellantoni said. “She has inspired students to be the best in [the journalism] field.” Budoff Brown concluded by discussing her own values as a news reporter and how she ensures objectivity at Politico. Politico editor Carrie Budoff Brown spoke about objectivity and today’s political climate to an audience of nearly 60 in Wallis Annenberg Hall Tuesday. The event was moderated by Annenberg Media Center Director Christina Bellantoni.center_img Budoff Brown said it’s important for journalists to remain objective in their coverage because if one reporter shows bias, readers can lose trust in news.    Budoff Brown discussed how Politico is different from other news outlets. Because of its focus on politics and policy, it hires journalists with varying political views but still expects unbiased reporting.   “I want everyone to look at the media and believe it’s a credible institution,” Budoff Brown said. “I’m trying to do my part, There’s a time and a place for expression [and] opinion, and I think if you’re a reporter at Politico you know what our jam is.” “None of us are not biased,” Budoff Brown said. “I know that. I’m not asking people to curb all of their feelings, but I do want them to bring objectivity to [reporting].”   “I’ve been really into Politico for a while,” Minasian said, “I’m interested in agenda and learning what people are up to in editorial rooms … I’m interested in how [Politico] structures their view of how they should report.”last_img read more