A global convergence of accounting standards is on the horizon, marked most recently by the Securities and Exchange Commission’s (SEC’s) vote to move U.S. companies toward International Accounting Standards. As a result, changes made by the International Accounting Standards Board (IASB) could have important implications for publicly traded companies around the world. Yet, many companies are not familiar with the IASB’s proposed changes to IAS19 – its standard for accounting for employee benefits – and the majority of those that are do not support its proposal.
Watson Wyatt’s survey on the IASB’s March 2008 discussion paper, “Preliminary Views on Amendments to IAS19 Employee Benefits,” examines employers’ reactions to the proposal, which would make significant changes to the way retirement benefits are accounted for in employer financial statements. While, if implemented, the changes would not reduce most employers’ commitment to their defined benefit (DB) pension and retiree medical plans, a sizeable minority say the proposal would weaken their company’s commitment to its DB plans.
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