Document ID: chunk:federal_register_of_legislation:F2024L00075:reg:38:p35
Version: federal_register_of_legislation:F2024L00075
Segment Type: reg
Provision Reference: reg 38 (pt 35/76)
Character Range: 131072–134139

and other liabilities should be measured at fair value, with remeasurement changes recognised in the income statement when they occur.
BC87            The AASB concluded that a superannuation entity should present the net benefits allocated to defined contribution members' accounts for a period as an allocation of operating profit or loss in the income statement for that period.  This is in the interests of having information that provides users with an understanding of net benefits allocated to defined contribution members' accounts.

Net changes in defined benefit member liabilities
BC88            Under AAS 25, a defined benefit superannuation plan that measures members' accrued benefits at the end of each period is permitted (but not required) to recognise the remeasurement change for the period as an expense in the operating statement.  In contrast, an entity that does not measure those benefits at the end of each period would disclose in the notes the amounts of members' accrued benefits at the most recent measurement date and at the previous measurement date.
BC89            The AASB noted that:
(a)                   the AAS 25 requirements do not facilitate the provision of comparable information useful for users in a superannuation context because defined benefit superannuation entities that are similar in all significant respects could prepare their financial statements on different bases;
(b)                   it has concluded, in the interests of providing users with useful information on a timely basis, and consistent with the treatment of similar types of liabilities, such as insurance contract liabilities, a superannuation plan should recognise defined benefit members' accrued benefits as a liability and measure them as at the end of each period;
(c)                   other Australian Accounting Standards that permit or require liabilities to be remeasured generally require remeasurement changes to be recognised in profit or loss in the period they occur; and
(d)                   it has concluded most of a superannuation entity's assets and other liabilities should be measured at fair value, with remeasurement changes recognised in profit or loss in the period they occur.
BC90            However, the AASB also noted, unlike many other types of liabilities, defined benefit member liabilities are funded, at least in part, by contributions from members' employers and the members themselves.  Consequently, the 'cost' to a superannuation entity of providing defined benefit entitlements for a reporting period is the net rather than gross change in the entity's obligations for defined benefit member liabilities for the period.  The net change is the difference between the opening and closing balances of defined benefit member liabilities for the period, after adjusting for movements of member benefits into and out of the defined benefit plan, including net after tax contributions, benefits, transfers between reserves and accrued benefits, and any gains and losses on non-routine settlements, curtailments