IAS 26
Accounting and Reporting by Retirement Benefit Plans
1Objective and scope
IAS 26 is a narrow standard: it prescribes the accounting and reporting by a retirement benefit plan itself when the plan produces its own financial statements, as a report to its members. It does not apply to the sponsoring employer's own financial statements, which account for their pension obligations under IAS 19 instead.
2Key definitions
3What the plan reports
| Type of plan | Required report |
|---|---|
| Defined contribution plan | A statement of net assets available for benefits, and a description of the funding policy |
| Defined benefit plan | A statement of net assets available for benefits, together with either the actuarial present value of promised retirement benefits (distinguishing vested and non-vested benefits), or a reference to that information in an accompanying actuarial report |
Plan investments are carried at fair value; for marketable securities, fair value is market value. Where the actuarial present value of promised benefits is presented, it is measured using current actuarial assumptions, and any significant actuarial assumptions and the method used are disclosed.
4Presentation and disclosure
- A statement of changes in net assets available for benefits
- A summary of significant accounting policies
- A description of the plan and the effect of any changes in the plan during the period
5Examinable focus
What KASNEB tests
IAS 26 is applied only when a retirement benefit plan itself (a pension fund) prepares its own financial statements, which is uncommon, so KASNEB tests it lightly: mainly recognising that it exists and is distinct from IAS 19, and the defined contribution vs defined benefit reporting distinction above. The numerically heavy pension work sits in IAS 19, examined from the sponsoring employer's side.