What Investors Need to Know about Post-Employee Benefit Accounting

Accounting for post-employment benefits under defined-benefit plans is a complex financial reporting area that has traditionally posed several interpretation challenges for investors and other readers of financial statements. The International Accounting Standards Board (IASB) recently updated its accounting requirements for post-employment benefits, with the goal of reducing complexity and better depicting the underlying economic realities for companies based on their defined-benefit plans. These changes took effect 1 January 2013.

IASB board member Patrick Finnegan, CFA, Fred Nieto, CFA, of the IFRS Education Initiative, and Vincent Papa, PhD, CFA, director of financial reporting policy at CFA Institute discuss the rationale for these changes and what investors can expect from updates to related accounting and disclosure standards.