Accounting standards applicable to employee future benefits: what Quebec-based companies do?LinkedIn
There, in black and white
NB Bulletin Vol. 16 N. 18, December 2013
Several private sector companies will soon be finalizing their budgets for the upcoming fiscal year and preparing their financial statements for the current fiscal year. These must include the recognition of the promises for defined benefit pension plans (DB plans) and for group insurance plans offered to retirees (other post-retirement benefits).
The assumptions required to determine the defined benefit obligation and the defined benefit cost (the expense) must be established by the company’s management. For the ninth consecutive year, we have analyzed the annual reports of Quebec-based companies listed on the S&P/TSX Index whose fiscal year was ending between September 30 of the previous year and March 31 of the current year. All of these companies sponsored at least one DB plan and the majority of them offered other post-retirement benefits.
Our analysis is divided into three sections. The first section presents the assumptions used by the companies included in our analysis in percentile format. The tables present a comparison of the assumptions used for fiscal years ending in 2012 (between September 30, 2012 and March 31, 2013) and in 2011 (between September 30, 2011 and March 31, 2012). The second section summarizes the findings from these tables and from our data analysis. The third and final section presents additional information with respect to some measures that could potentially impact future accounting results for some enterprises.
We invite you to consult the “NB Bulletins” section of our website to review the results, findings and comments for previous years. However, given that the composition of the S&P/TSX Index varies regularly based on predefined criteria, the group of companies analyzed this year may differ from that analyzed in prior years.
1. Selection of assumptions
3. Additional information
Last spring, in a There, in black and white bulletin, we informed you of the amendments to the Canadian accounting standards for private enterprises (new Section 3462) applicable for fiscal years beginning on or after January 1, 2014. For more information, we invite you to consult our bulletin "Amendments to accounting standards applicable to employee future benefits".
Moreover, the Accounting Standards Board (AcSB) published in June an exposure draft on amendments to the Canadian accounting standards for private sector non-profit organizations for fiscal years beginning on or after January 1, 2014. The AcSB proposed to add the Section 3463 to the Part III of the CPA Canada Handbook – Accounting, which will be a supplement to Section 3462 of Part II of the Handbook applied by these organizations. The Section 3463 provides for the recognition of the remeasurement elements (including the actuarial gains and losses) in the statement of evolution of net assets instead of the expense. The AcSB recently confirmed that Section 3463, exactly as presented in the exposure draft, will be added to the Handbook by the end of this year.
Please feel free to contact us for additional information.
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