doc__table__780

| 115 | Where a curtailment relates to only some of the employees covered by a plan, or where only part of an obligation is settled, the gain or loss includes a proportionate share of the previously unrecognised past service cost and actuarial gains and losses (and of transitional amounts remaining unrecognised under paragraph 155(b)). The proportionate share is determined on the basis of the present value of the obligations before and after the curtailment or settlement, unless another basis is more rational in the circumstances. For example, it may be appropriate to apply any gain arising on a curtailment or settlement of the same plan to first eliminate any unrecognised past service cost relating to the same plan. Example illustrating paragraph 115 An entity discontinues an operating segment and employees of the discontinued segment will earn no further benefits. This is a curtailment without a settlement. Using current actuarial assumptions (including current market interest rates and other current market prices) immediately before the curtailment, the entity has a defined benefit obligation with a net present value of 1 000, plan assets with a fair value of 820 and net cumulative unrecognised actuarial gains of 50. The entity had first adopted the standard one year before. This increased the net liability by 100, which the entity chose to recognise over five years (see paragraph 155(b)). The curtailment reduces the net present value of the obligation by 100 to 900. Of the previously unrecognised actuarial gains and transitional amounts, 10 % (100/1 000) relates to the part of the obligation that was eliminated through the curtailment. Therefore, the effect of the curtailment is as follows: Before curtailment Curtailment gain After curtailment Net present value of obligation 1 000 (100) 900 Fair value of plan assets (820) — (820) 180 (100) 80 Unrecognised actuarial gains 50 (5) 45 Unrecognised transitional amount (100 × 4/5) (80) 8 (72) Net liability recognised in balance sheet 150 (97) 53

← doc__table__779 · All articles · Presentation →

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