Document ID: chunk:federal_register_of_legislation:F2024L00075:reg:38:p6
Version: federal_register_of_legislation:F2024L00075
Segment Type: reg
Provision Reference: reg 38 (pt 6/76)
Character Range: 38663–41875

estimated to yield future net cash inflows that would be sufficient to meet accrued benefit payments when they are expected to fall due.  In this context:
(a)                   the amount relates to members' service up to the reporting date;
(b)                   it is assumed the accrued benefits will be fulfilled and, accordingly, there is no adjustment for the superannuation entity's own credit risk;
(c)                   the expected cash outflows relevant to measuring the liability take into account the timing and probabilities attaching to various factors that reflect the characteristics of the members/beneficiaries and the features of entitlements (including expected rates of member turnover; mortality and disability; salary adjustment; early retirement; and member choice of available options, such as lump sum and pension options).  The relevant portfolio of investments would not necessarily be a portfolio of instruments that is expected to yield contractual net cash inflows that match the timing of the expected net cash outflows relating to the liability.  It might be a portfolio that is expected to yield either contractual or non-contractual net cash inflows that match the timing of expected net cash outflows relating to the liability;
(d)                   the investment returns relevant to measuring the liability are those expected on a portfolio of investments that reflects the opportunities available in investment markets and not necessarily the actual investments held by the superannuation entity to meet accrued defined benefit member liabilities.  Accordingly, the measurement is not dependent on whether the benefits are fully funded, under/over funded or completely unfunded.  However, in many cases there would be a strong relationship between the portfolio of investments used for measurement purposes and, where relevant, the superannuation entity's actual portfolio of investments, consistent with its investment strategy in respect of meeting defined benefit member liabilities;
(e)                   the accrued benefit amount might be more or less than the value of vested benefits; and
(f)                    the discount rate would exclude risks incorporated in the expected cash flows (to avoid 'double-counting' of the impacts of risks).
AG26           In applying the defined benefit member liability measurement requirements of this Standard, superannuation entities may use estimates, averages and computational shortcuts provided that application of those shortcut techniques yield a reasonable approximation of the defined benefit member liabilities.

Employer-sponsor receivables (paragraphs 18 and 19)
AG27           A specific contractual or statutory arrangement in place between the superannuation entity and the relevant employer-sponsor(s) in relation to funding defined benefit member liabilities might give rise to an asset recognised in accordance with paragraph 18.
AG28           A receivable meeting the definition and recognition criteria for an asset in the Conceptual Framework for Financial Reporting would be measured at its intrinsic value.  That is, the difference between the defined benefit member liabilities and the amount of the