FAS 87 to IAS 19

[Malyerac]

A curious intern would like insight into the main differences between the two when it comes to year-to-year pension expense volatility and what main concerns there might be when it comes to a switch from FAS 87 to IAS 19. Prior and post 1/1/2013.

Somethings that I do know are that for the IAS 19:

Effective 1/1/2013, new IAS-19 regulation introduces the concept of “Net Interest,” comprised of the Interest Cost and Expected Return on Assets. The net interest is the PBO less the fair value of assets, multiplied by the discount rate.

The discount rate, not EROA, is now used to measure plan assets.

The “10% corridor” has been eliminated, and all past service costs and gains/losses must be immediately recognized in P&L.


(Links to any particularly helpful readings would be appreciated)
Thank you!