IAS 19 – Employee Benefits
The amendment to IAS 19 arises from the annual improvements projects, and clarifies the discount rate to be used in regional markets. The amendment clarifies that the discount rate to be used for postemployment benefit obligations must be assessed at a currency level in which the obligation is denominated and not a country/regional market level where the obligation is located when determining the rate based on high quality corporate bonds or government bonds when there is no deep market in high quality corporate bonds in that currency. In practice, this is most likely to affect entities operating within a currency union, such as the Eurozone.
The amendment must be applied prospectively.
First-time adoption of this amendment takes place on the first reporting day after Dec. 2016.