doc__table__705

| 50 | Accounting by an entity for defined benefit plans involves the following steps: (a) using actuarial techniques to make a reliable estimate of the amount of benefit that employees have earned in return for their service in the current and prior periods. This requires an entity to determine how much benefit is attributable to the current and prior periods (see paragraphs 67-71) and to make estimates (actuarial assumptions) about demographic variables (such as employee turnover and mortality) and financial variables (such as future increases in salaries and medical costs) that will influence the cost of the benefit (see paragraphs 72-91); (b) discounting that benefit using the Projected Unit Credit Method in order to determine the present value of the defined benefit obligation and the current service cost (see paragraphs 64-66); (c) determining the fair value of any plan assets (see paragraphs 102-104); (d) determining the total amount of actuarial gains and losses and the amount of those actuarial gains and losses to be recognised (see paragraphs 92-95); (e) where a plan has been introduced or changed, determining the resulting past service cost (see paragraphs 96-101); and (f) where a plan has been curtailed or settled, determining the resulting gain or loss (see paragraphs 109-115). Where an entity has more than one defined benefit plan, the entity applies these procedures for each material plan separately.

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Source: EUR-Lex (Cellar) · retrieved 2026-11-08 · Text as adopted (Official Journal); later amendments are not incorporated in this text.