doc__table__814

| 156 | On the initial adoption of the standard, the effect of the change in accounting policy includes all actuarial gains and losses that arose in earlier periods even if they fall inside the 10 % ‘corridor’ specified in paragraph 92. Example illustrating paragraphs 154 to 156 At 31 December 1998, an entity's balance sheet includes a pension liability of 100. The entity adopts the standard as of 1 January 1999, when the present value of the obligation under the standard is 1 300 and the fair value of plan assets is 1 000. On 1 January 1993, the entity had improved pensions (cost for non-vested benefits: 160; and average remaining period at that date until vesting: 10 years). The transitional effect is as follows: Present value of the obligation 1 300 Fair value of plan assets (1 000 ) Less: past service cost to be recognised in later periods (160 × 4/10) (64) Transitional liability 236 Liability already recognised 100 Increase in liability 136 The entity may choose to recognise the increase of 136 either immediately or over up to 5 years. The choice is irrevocable. At 31 December 1999, the present value of the obligation under the standard is 1 400 and the fair value of plan assets is 1 050. Net cumulative unrecognised actuarial gains since the date of adopting the standard are 120. The expected average remaining working life of the employees participating in the plan was eight years. The entity has adopted a policy of recognising all actuarial gains and losses immediately, as permitted by paragraph 93. The effect of the limit in paragraph 155(b)(iii) is as follows. Net cumulative unrecognised actuarial gains 120 Unrecognised part of transitional liability (136 × 4/5) (109) Maximum gain to be recognised (paragraph 155(b)(iii)) 11

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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.