On 03/05/2013 17:32:18, Oliver Boyle wrote:
Great article again guys. One question in regards to the accounting changes with the new IAS19. As stated in the article, under the old standard, unrecognised actuarial losses were added to the deficit. On the new standard, these losses must be immediately recognised, do they do through the P&L or reserves?

On 04/05/2013 13:07:23, Ken wrote:
In the PWC guide to IAS19R they state the following:
"Actuarial gains and losses are recognised in the balance sheet immediately, with a charge or credit to other comprehensive income (OCI) in the periods in which they occur."
Therefore Oliver the Statement of Comprehensive Income rather than the P&L should be examined to identify the size of the loss recognised.

On 09/05/2013 11:08:21, David wrote:
Ken, very informative article.

Regarding the actuarial assumptions used to calculate the pension obligation (compensation growth rate etc), are these usually disclosed in the notes? Would be interesting to directly compare Japanese assumptions vs US and European.

Also, when a firm recognises an actuarial loss (or a gain) through other comprehensive income, do companies HAVE to recognise it in the current years statements?
Or, because companies now have to recognise the actuarial gain/loss in the OCI due to an accounting change, are companies able to retroactively apply this accounting change and restate previous statements...effectively hiding an actuarial loss in a previous statement making it harder for analysts and investors to discover?

On 13/05/2013 14:58:25, Ken wrote:
Comparing Japanese assumptions with other countries is difficult because disclosure is poor. Even Canon only discloses Compensation growth rate assumptions. (http://www.canon.com/ir/annual/2012/report2012.pdf)

With regard to how IAS19R requires companies to recognise actuarial losses I have to point out that at the end of the day it cannot be hidden from the Balance Sheet and therefore any analyst looking at a history of long term liabilities should notice any significant change.