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IAS 19 limits the amount of a surplus arising from a defined benefit plan that an entity can recognise as an asset. IFRIC 14 clarifies how an entity applies those requirements. Further, to protect pension plan participants, in many jurisdictions, laws or contractual terms require employers to make minimum funding payments for their pension or other employee benefit plans. IFRIC 14 also addresses the interaction between such minimum funding requirements and the limits in IAS 19 on the measurement of the defined benefit asset or liability.
Standard history
In July 2007 the International Accounting Standards Board issued IFRIC 14 IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. It was developed by the Interpretations Committee.
In November 2009 IFRIC 14 was amended to address prepayments of future minimum funding requirement contributions.
Other Standards have made minor consequential amendments to IFRIC 14. They include IFRS 13 Fair Value Measurement (issued May 2011), IAS 19 Employee Benefits (issued June 2011), Amendments to References to the Conceptual Framework in IFRS Standards (issued March 2018), IFRS 18 Presentation and Disclosure in Financial Statements (issued April 2024) and IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued in May 2024).
