Discount rate, as with all other actuarial assumptions, remains the responsibility of the Board of the reporting enterprise. It is their responsibility to ensure that they have done enough to ensure the actuarial assumptions were set correctly with due attention to the work done by the actuary. Simplification Initiative is to identify, evaluate, and improve areas of generally accepted accounting principles (GAAP) for which cost and complexity can be Less unamortized discount based on imputed interest rate of 8% 320,000 370,000 Note receivable less unamortized discount $ 680,000 $ 630,000 Research project on discount rates – review of existing requirements; 19 Jun 2014. The Board received an overview of the proposed approach to examine an assess discount rate requirements in IFRSs. As this session was for information only, the Board was not asked to make any decisions. IAS 19 — Actuarial assumptions: discount rate; 13 Nov 2013 varying opinions of future rates of return. It is typically selected as a long-term reflection of plan assets and liabilities. For pension accounting, this is called the discount rate and must reflect either the market rates currently applicable to settling the benefit obligation or the rates of return on high The Committee agreed with the staff that this was a matter of judgement and agreed with staff that given the effect that choosing the discount rate will have on the value of defined benefit obligations, an entity should disclose how it has determined the rate (e.g., using government bonds, considering only AA-Bonds, etc.).
New lease accounting standards under IFRS (IFRS 16) and U.S. GAAP (ASC to avoid disputes, such as the discount rate, whether to assume that an option to 28 Aug 2018 U.S. GAAP and IFRS define control differently, and as a result, the discount rate ) are imputed by removing tax cash flows and solving for the
This use of a constant interest rate is known as the ‘interest method’ (also referred to as the “effective interest method”, although the FASB does not use that terminology in the Codification), and is applied to a discount or premium realized upon issuance, and to debt issuance costs incurred on the transaction. Discount rate, as with all other actuarial assumptions, remains the responsibility of the Board of the reporting enterprise. It is their responsibility to ensure that they have done enough to ensure the actuarial assumptions were set correctly with due attention to the work done by the actuary. These changes are reflected in the Mercer Index Rates — discount rates for the four Mercer sample pension plans, as determined using the Mercer Yield Curve. In February, the Mercer Index Rates ranged from a decrease of 19 basis points for the Young and Average plans to a decrease of 22 basis points for the Retiree plan. The discount rate affects the amount of the lessee’s lease liabilities – and . a host of key financial ratios. The new standard brings forward definitions of discount rates from the current leases standard. But applying these old definitions in the new world of on-balance Therefore, the discount rate for a defined benefit plan located in a country without a deep market for high-quality corporate bonds may differ under US GAAP. Further, US GAAP requires selection of assumed discount rates that are consistent with the manner in which benefit payments are expected to be settled (the ‘settlement approach’). --> discount is amortized using "interest method" 3. Amortization of discount--> interest expense for note payable--> interest income for note receivable Example 3: Note payable Purchased a property with $3,000 fair value and issued a $3,300 note payable Cost of the asset = $3,000 Face amount = $3,300 Discount on note payable = $300
New lease accounting standards under IFRS (IFRS 16) and U.S. GAAP (ASC to avoid disputes, such as the discount rate, whether to assume that an option to
1 May 2019 capital leases are accounted for under legacy GAAP) over the lease term. For a lessor, the discount rate for the lease is the rate implicit in the The measurement of the net finance cost under existing UK GAAP is based on determining the yield on scheme assets and applying a discount rate to scheme Interest Cost (same as the discount rate discussed later) = amount by which a company's existing defined benefit obligation increases as a result of the passage