What is the difference between PAS 19 and ASC 715 (US GAAP)?

Here are some highlights on the comparison between the Amended PAS 19R and the ASC 715 (US GAAP) reporting of employee benefits:

  1. Computation methodology – both standards use the same projected unit cost method (PUCM) in determining the present valuation of the defined benefit obligation.
  2. Treatment of overfunded – in US GAAP, there is no ceiling on the surplus to be recognized, while in PAS 19R, there is an asset ceiling, which requires additional computations.
  3. Actuarial gains/losses (AGL) – in US GAAP, AGL is accumulated in other comprehensive income (OCI) but subsequently amortized through profit & loss (with “recycling”). In PAS 19R, the AGL is immediately recognized in OCI without recycling.
  4. Overfunded or underfunded – same treatment for US GAAP and PAS 19R: balance sheet = deficit — if the plan is underfunded then the entire unfunded amount is recognized in the balance sheet. If the plan is overfunded, in US GAAP, the balance sheet reflects the entire surplus (no adjustment) while in PAS 19R, the balance sheet is the adjusted surplus due to asset ceiling.
  5. AGL in OCI – In US GAAP, this is the accumulated OCI then reclassified to P&L. In PAS 19R, the AGL can be accumulated in OCI or transferred within equity (reclassification to P&L is prohibited).
  6. Reports – PAS 19R requires more narrative and quantitative disclosures which include sensitivities, responsibilities of trustees, etc.


To sum it up, the liability comes out to be the same for both PAS 19R and US GAAP. As for the OCI and expense, it varies between the 2 reports because of the different treatment and guidelines.

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