The Commission of general accounting doctrines was consulted about the terms of first accounting of a provision for retirement benefits in the financial statements of a company having or not signed an insurance contract and paid premiums under these commitments.
The Commission distinguished two cases:
• If the entity has not signed a contract of insurance, the provision to account for the opening and closing of the fiscal year is the actuarial liability in respect of retirement benefits. The provision calculated at the beginning of the year is to be posted as retained earnings and the change in the allowance during the period of the change is an income or expense to be recognized in income.
• If the entity has signed an insurance contract, the allowance assessed opening and closing date of the change is the difference between the actuarial liability and the value of the funds paid by the company to insurance. The provision valued at the opening of the period of the change is charged to retained earnings and the change in the provision of these two dates is an income or expense to be recognized in income.
The Commission has specified that provisioning the retirement benefits in its entirety causes a change in the accounting method and makes it necessary to charge as retained earnings at the beginning of the year having or not signed an insurance contract.