IAS 19 is an international standard governing the accounting of liabilities and costs of employee benefits.
Which companies report according to IAS 19?
Generally, all listed companies in Sweden are required to report according to IAS 19. Further, some non-listed Swedish companies are required to report according to IAS 19 indirectly as they are owned by a foreign mother company which reports under IFRS.
IASB determines the requirements for IAS 19
The International Accounting Standards Boards (IASB) is an independent body with the aim to develop and harmonize global accounting standards across countries.
Pension liability valuation according to IAS 19 compared to Swedish accounting
The present value of a defined benefit pension liability should be calculated using the Projected Unit Credit (PUC) actuarial method according to IAS 19.
Unlike in a Swedish accounting valuation, the PUC method takes into account expected future changes in the pension rights of the individuals. With consideration for a company’s specific assumptions, the pension liability is a present value of future expected cash-flows.