# IAS 19 employee benefit valuations for US subsidiaries

Canonical: https://finbryn.com/us/services/actuarial-services/ias-19-employee-benefit-valuations

Finbryn provides IAS 19 defined benefit valuation support for US subsidiaries of foreign parents that report under IFRS: obligation, service cost, net interest and remeasurement schedules plus a US GAAP bridge, in the parent's group template, for review and signature by a credentialed signing actuary. Checked 2026-10-02 against the IFRS Foundation text.

A US subsidiary needs an IAS 19 valuation when a foreign parent consolidates it under IFRS Standards and the subsidiary sponsors a defined benefit pension plan, a retiree medical plan or another long-term benefit. The [IFRS Foundation](https://www.ifrs.org/issued-standards/list-of-standards/ias-19-employee-benefits/) describes IAS 19 as the standard for all types of employee benefits except share-based payment, and it covers short-term benefits, defined contribution and defined benefit plans, other long-term benefits and termination benefits. This page deals with the defined benefit side, where the actuarial work sits.

The harder case is the dual reporter: a US entity that files US GAAP statements under ASC 715 for its own auditor and sends IAS 19 figures up to the group. The two standards share a census and a plan document but not a method. [IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html) mandates the projected unit credit method (paragraph 67), charges net interest on the net liability instead of interest cost less an expected return (paragraph 123), and sends every remeasurement to other comprehensive income without reclassifying it (paragraph 122). The table below sets the main differences from ASC 715 side by side, with a primary source on each row.

Finbryn prepares the obligation, service cost, net interest and remeasurement schedules in the parent's group template, a sensitivity analysis and, where both bases are needed, the bridge between the ASC 715 figures and the IAS 19 figures. [Hesham Khan](/about) is Finbryn's signing actuary: he reviews the assumptions and the results and signs the report. The workpapers Finbryn prepares are not a certification, and your group and local auditors decide whether the evidence meets their needs. Retiree medical premium and claims data reach us de-identified, and we do not take protected health information.

Your parent's group accounting manual, not Finbryn, decides which basis each package uses. We work from the group's reporting calendar and ask for its template and policy memo at the start.

Claims liabilities for self-funded programs are covered by [loss reserve studies](/services/actuarial-services/loss-reserve-studies).

What you get: IAS 19 defined benefit obligation and service cost; Remeasurement amounts for other comprehensive income; Sensitivity analysis on the key assumptions; A US GAAP to IFRS reconciliation of the benefit figures; Reporting pack in the parent's group template

Software we work in: Microsoft Excel, Python

How filing works: We prepare the return and the working papers. A credentialed signer or licensed partner signs and files it, or you file it yourself.

## Which US subsidiaries need an IAS 19 valuation?

Three kinds of US entity end up needing IAS 19 figures: a subsidiary consolidated by a foreign parent that reports under IFRS, a US entity that prepares IFRS statements for a non-US lender, regulator or investor, and an acquired US business whose group has not yet converted its plan accounting to the parent's basis.

Most are mid-sized subsidiaries with a legacy US pension or retiree medical plan that the parent inherited in an acquisition. The plan is small in the parent's context, but the group close still asks for a defined benefit obligation, an expense and a set of disclosures on the parent's schedule.

What the group usually asks for:

- The defined benefit obligation and service cost on the IAS 19 basis
- Net interest on the net liability or asset and the remeasurements for OCI
- A sensitivity table for the key assumptions
- A reconciliation from the local US GAAP figures when both are kept

## How does IAS 19 differ from ASC 715, row by row?

IAS 19 and ASC 715 differ in eight places. The IAS 19 column cites paragraphs of the [IFRS Foundation's published text](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html) (2026 issued edition); the ASC 715 column cites FASB updates and pre-Codification Statements, superseded as authoritative text by the Codification ([Statement 168](https://storage.fasb.org/fas168.pdf)), because the Codification is behind a login.

| Topic | IAS 19 | ASC 715 | Source |
| --- | --- | --- | --- |
| Plan assets in cost | Net interest: net liability or asset times the discount rate, with interest income on assets at that rate (paragraphs 123, 125) | Interest cost, expected return on plan assets and amortization are separate components | [IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html), [ASU 2017-07](https://storage.fasb.org/ASU%202017-07.pdf) |
| Gains and losses | Remeasurements go to OCI and are not reclassified to profit or loss (paragraph 122) | Gains and losses go to OCI, then are amortized into cost; for retiree benefits the corridor is 10 percent of the greater of the obligation or the market-related value of assets (Statement 106, paragraph 59) | [IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html), [FASB 106](https://storage.fasb.org/aop_fas106.pdf), [FASB 158](https://storage.fasb.org/fas158.pdf) |
| Plan amendments | Past service cost expensed at the earlier of the amendment or curtailment and the related restructuring or termination cost (paragraph 103) | Prior service cost goes to OCI when it arises and is recognized in cost later | [IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html), [FASB 158](https://storage.fasb.org/fas158.pdf) |
| Actuarial method | Projected unit credit method required (paragraph 67); benefit attributed under the plan's formula, straight-line where later service earns a materially higher benefit (paragraph 70) | Pensions: benefit attributed under the plan's formula ([Statement 87](https://storage.fasb.org/aop_fas87.pdf), paragraph 40); retiree benefits: generally equal amounts over the attribution period (Statement 106, paragraph 43) | [IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html), [FASB 106](https://storage.fasb.org/aop_fas106.pdf) |
| Discount rate | High-quality corporate bond yields in the plan's currency; government bonds if no deep market (paragraph 83) | High-quality fixed-income portfolio that would fund the benefits (Statement 106, paragraph 31A) | [IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html), [FASB 106](https://storage.fasb.org/aop_fas106.pdf) |
| Surplus | Net asset measured at the lower of the surplus and the asset ceiling (paragraph 64) | Funded status is plan assets at fair value less the benefit obligation | [IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html), [FASB 158](https://storage.fasb.org/fas158.pdf) |
| Presentation | Service cost and net interest in profit or loss, remeasurements in OCI; costs may enter the cost of assets (paragraphs 120, 121) | Service cost with other compensation, other components outside operating results, only service cost capitalized | [IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html), [ASU 2017-07](https://storage.fasb.org/ASU%202017-07.pdf) |
| Sensitivity disclosure | Required for each significant actuarial assumption (paragraph 145) | ASU 2018-14 removed the health care trend sensitivity for public entities | [IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html), [ASU 2018-14](https://storage.fasb.org/ASU%202018-14.pdf) |

## Do I need IAS 19, ASC 715, or both?

You need IAS 19 when a parent consolidates you under IFRS, ASC 715 when your own statements use US GAAP, and both when each is true. The decision tree asks at most two questions and ends at IAS 19 only, ASC 715 only, or both, and the signing actuary reviews and signs whichever valuation applies.

The tree is a screening aid, not an opinion on which framework applies to you. Your parent's group accounting manual and your own auditors decide the basis for each reporting package, so ask the group controller for the policy memo before running either valuation.

If you land on "both", the practical consequence is two sets of calculations from one data file: the same census, plan document and asset statement, but separate obligation, cost and OCI schedules, and a bridge that explains each difference. Where the group only needs IAS 19 numbers, the US GAAP schedules are not required for the group package. Statutory or local filing rules, such as the plan's own annual report, run on separate rules and are not covered by either standard.

Diagram: Do I need IAS 19, ASC 715, or both?. Up to two yes or no questions, starting with whether a parent consolidates you under IFRS, lead to IAS 19 only, ASC 715 only, or both.

## What do the IAS 19 sensitivity disclosures require?

IAS 19 paragraph 145 requires a sensitivity analysis for each significant actuarial assumption as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes in the assumption that were reasonably possible at that date. It also requires the methods and assumptions used and their limitations, and any changes from the previous period and the reasons ([IFRS Foundation, IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html), read on 2026-10-02).

Our sensitivity schedule recalculates the obligation once per assumption, holding the others constant. **Illustrative** plan with a base obligation of 5,000 ($000):

| Assumption | Change | Obligation | Effect |
| --- | --- | --- | --- |
| Discount rate | +0.5 point | 4,700 | (300), or -6.0% |
| Discount rate | -0.5 point | 5,320 | +320, or +6.4% |
| Salary growth | +0.5 point | 5,090 | +90, or +1.8% |
| Salary growth | -0.5 point | 4,920 | (80), or -1.6% |
| Life expectancy | +1 year | 5,180 | +180, or +3.6% |

Each effect is the new obligation less 5,000, and each percentage is that effect over 5,000. The discount rate effects differ in size because the relationship is convex, which is why the tables are run, not extrapolated. Illustrative figures only.

## How do the same plan's numbers change under each standard?

For the same plan, IAS 19 net interest and ASC 715 cost give different expense numbers, and the asset return difference moves to OCI. This continues the **illustrative** plan used on our ASC 715 page: opening obligation 5,000, opening plan assets 3,800, discount rate 5.0%, expected return on assets 7.0%, actual return 380, all in $000, ignoring the timing of contributions and benefit payments.

| Item | IAS 19 | ASC 715 |
| --- | --- | --- |
| Interest on obligation | 250 (5.0% of 5,000) | 250 |
| Return on plan assets in profit or loss | (190), interest income at 5.0% of 3,800 | (266), expected return at 7.0% of 3,800 |
| Financing charge in profit or loss | 60 | (16) |
| Asset return difference | 190 to OCI (380 actual less 190) | 114 gain deferred in OCI (380 less 266) |

Check: 250 - 190 = 60, and 250 - 266 = (16). The IAS 19 financing charge is 76 higher because the 7.0% expected return is replaced by the 5.0% discount rate, and the 190 of actual return above interest income goes to OCI and is not reclassified (paragraphs 122, 125 and 127 of [IAS 19](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html)).

## The process

1. **Confirm the reporting basis with the group**: Get the parent's template, accounting policy memo and reporting calendar, and confirm whether the US entity also needs ASC 715.

2. **Reconcile census and asset data**: Tie participant, pay and retiree records to payroll and the trustee statement, and log exceptions for your plan administrator.

3. **Set the IAS 19 assumptions**: Document a high-quality corporate bond discount rate in the plan's currency, pay, inflation and mortality assumptions, for the signing actuary to select.

4. **Run the projected unit credit model**: Calculate the obligation, current service cost, net interest and the remeasurements for other comprehensive income.

5. **Build sensitivities and the US GAAP bridge**: Recalculate for each significant assumption and, where both bases apply, reconcile the ASC 715 and IAS 19 figures.

6. **Signing actuary review and signature**: Finbryn's signing actuary reviews the assumptions and results and signs the report.

7. **Group and local auditor review**: The parent's auditor and your own receive the schedules in the group template with the reconciliation attached.

## Common problems we fix

| The problem | How we fix it |
| --- | --- |
| The group package asks for IAS 19 and the local auditor wants ASC 715 | We run both from one data file and add a bridge that explains each difference, so neither team rebuilds the other's numbers. |
| Expected return on assets was left in the IAS 19 cost | We replace it with net interest at the discount rate and move the return difference into remeasurements for OCI. |
| Plan amendment cost is being amortized in the IFRS pack | We recognize past service cost in profit or loss at the earlier of the amendment or the related restructuring cost, as paragraph 103 requires. |
| Sensitivity table does not say what changed from last year | We document the methods, limitations and any change from the prior period, which paragraph 145 asks for. |
| The IAS 19 discount rate has no written link to bond yields | We document market yields on high-quality US dollar corporate bonds at the reporting date, matched to the plan's term, as paragraph 83 requires. |

## By the numbers

| Figure | What it means | Source |
| --- | --- | --- |
| 1 January 2013 | annual periods beginning on or after this date for the 2011 revision of IAS 19, which removed the corridor and introduced net interest | [ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html) (2026-10-02) |
| IAS 19.145 | paragraph requiring a sensitivity analysis for each significant actuarial assumption that was reasonably possible | [ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html) (2026-10-02) |
| June 2011 | month the IASB issued the amendments to IAS 19, removing the corridor approach and requiring remeasurements in OCI | [ifrs.org/content/dam/ifrs/project/employee-benefits-amendments-to-ias-19/empbenfsias190611.pdf](https://www.ifrs.org/content/dam/ifrs/project/employee-benefits-amendments-to-ias-19/empbenfsias190611.pdf) (2026-10-02) |

## Glossary

- **Defined benefit obligation (DBO)**: The IAS 19 term for the present value of benefits earned to date, measured with the projected unit credit method.

- **Net interest**: The net defined benefit liability or asset multiplied by the discount rate at the start of the year, replacing separate interest cost and expected return.

- **Remeasurements**: Actuarial gains and losses, return on plan assets above net interest and asset ceiling changes, recognized in OCI.

- **Past service cost**: The change in the obligation from a plan amendment or curtailment, expensed under IAS 19 at the earlier of the amendment and the related restructuring or termination cost.

- **Projected unit credit method**: The actuarial method IAS 19 requires: benefits are projected and attributed to periods of service to measure the obligation and current service cost.

- **Asset ceiling**: The cap on a net defined benefit asset, determined using the paragraph 83 discount rate.

- **Dual reporter**: An entity that prepares both US GAAP and IFRS Standards figures for the same plan.

- **Group template**: The reporting form a parent sends to subsidiaries for consolidation, usually with its own deadlines and assumptions.

## Frequently asked questions: IAS 19 employee benefit valuations for US subsidiaries

**Q: What is the main difference between IAS 19 and ASC 715 in the income statement?**

A: IAS 19 charges net interest, which is the net defined benefit liability or asset times the discount rate, and has no separate expected return on assets (paragraph 123). ASC 715 reports interest cost, expected return and amortization as separate components (ASU 2017-07, paragraph 715-20-50-1(h)). Both rules checked 2026-10-02.

**Q: Are IAS 19 remeasurements ever recycled to profit or loss?**

A: No. IAS 19 paragraph 122 says remeasurements recognized in OCI are not reclassified to profit or loss in a later period, though the entity may transfer them within equity (IFRS Foundation text, checked 2026-10-02). ASC 715 releases gains and losses from AOCI into cost through amortization.

**Q: When is past service cost recognized under IAS 19?**

A: As an expense at the earlier of the date the plan amendment or curtailment occurs and the date the related restructuring costs or termination benefits are recognized (paragraph 103, checked 2026-10-02). Under ASC 715, prior service cost goes first to OCI and is recognized in cost later (FASB Statement 158).

**Q: Which discount rate does IAS 19 use for a US plan?**

A: Market yields at the end of the reporting period on high-quality corporate bonds, with government bond yields only for currencies that have no deep market in them, consistent with the currency and term of the obligations (paragraph 83, IFRS Foundation, checked 2026-10-02). US GAAP uses a high-quality fixed-income portfolio that would fund the benefits, so the two rates can differ.

**Q: What sensitivity disclosures does IAS 19 require?**

A: A sensitivity analysis for each significant actuarial assumption as of the year-end, showing the effect on the defined benefit obligation of reasonably possible changes, plus the methods, assumptions and limitations and any changes from the prior period (IAS 19 paragraph 145, checked 2026-10-02). Our schedule recalculates the obligation once per assumption.

**Q: What does an IAS 19 valuation cost?**

A: Fees depend on the number of plans, the participant count, the quality of the data file, whether a US GAAP bridge is also needed, how many sensitivities the group wants and the parent's reporting deadline. We found no public fee schedule for IAS 19 valuations that we could open on 2026-10-02, so we publish no range. Finbryn quotes in writing after seeing a data sample.

**Q: How do I choose a provider for IAS 19 and US GAAP dual reporting?**

A: Ask who signs the report, how the provider handles the differences between the two standards and whether it works to the parent's template. Ask for a sample bridge between ASC 715 and IAS 19 figures and for the date of the assumptions it would use. IAS 19 paragraph 145 sets the sensitivity disclosures, so ask to see that schedule too.

**Q: Can one valuation serve both ASC 715 and IAS 19?**

A: The census, plan document and asset data are shared, but the calculations are not: the cost components, the OCI treatment and the surplus cap differ, and the discount rates can differ. Finbryn runs both from one file and bridges them. See the [ASC 715 page](/services/actuarial-services/asc-715-pension-opeb-valuations).

Related services:
- [IFRS 17 implementation and reporting support for US insurers](https://finbryn.com/us/services/actuarial-services/ifrs-17-implementation-support)
- [ASC 715 pension and OPEB accounting valuations](https://finbryn.com/us/services/actuarial-services/asc-715-pension-opeb-valuations)
- [GASB 75 OPEB and GASB 101 compensated absences valuations](https://finbryn.com/us/services/actuarial-services/gasb-75-opeb-gasb-101-valuations)
- [White-label actuarial support for accounting firms and TPAs](https://finbryn.com/us/services/actuarial-services/white-label-actuarial-support)

Related guides:
- [IAS 19 vs ASC 715: Employee Benefit Accounting](https://finbryn.com/us/guides/ias-19-vs-asc-715-employee-benefits)

## Sources

1. [IFRS Foundation, IAS 19 Employee Benefits (published text, 2026 issued edition)](https://www.ifrs.org/content/dam/ifrs/publications/html-standards/english/2026/issued/ias19.html) (2026-10-02)
2. [IFRS Foundation, IAS 19 Employee Benefits (standard overview page)](https://www.ifrs.org/issued-standards/list-of-standards/ias-19-employee-benefits/) (2026-10-02)
3. [IFRS Foundation, Amendments to IAS 19 Employee Benefits: Project Summary and Feedback Statement (June 2011)](https://www.ifrs.org/content/dam/ifrs/project/employee-benefits-amendments-to-ias-19/empbenfsias190611.pdf) (2026-10-02)
4. [FASB, ASU 2017-07: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost](https://storage.fasb.org/ASU%202017-07.pdf) (2026-10-02)
5. [FASB, ASU 2018-14: Changes to the Disclosure Requirements for Defined Benefit Plans](https://storage.fasb.org/ASU%202018-14.pdf) (2026-10-02)
6. [FASB, Statement No. 158: Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans](https://storage.fasb.org/fas158.pdf) (2026-10-02)
7. [FASB, Statement No. 87: Employers' Accounting for Pensions (pre-Codification)](https://storage.fasb.org/aop_fas87.pdf) (2026-10-02)
8. [FASB, Statement No. 168: The FASB Accounting Standards Codification (pre-Codification Statements superseded)](https://storage.fasb.org/fas168.pdf) (2026-10-02)
9. [FASB, Statement No. 106: Employers' Accounting for Postretirement Benefits Other Than Pensions](https://storage.fasb.org/aop_fas106.pdf) (2026-10-02)

Reviewed October 2026

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