BC3 Accounting for post‑employment benefit promises is an important financial reporting issue. Anecdotal evidence and academic research suggested that many users of financial statements did not fully understand the information that entities provided about post‑employment benefits under the requirements of IAS 19 before the amendments made in 2011. Both users and preparers of financial statements criticised those accounting requirements for failing to provide high quality, transparent information about post‑employment benefits. For example, delays in the recognition of gains and losses give rise to misleading amounts in the statement of financial position and the existence of various options for recognising gains and losses and a lack of clarity in the definitions lead to poor comparability.

BC4 In July 2006 the Board added to its agenda a project on the accounting for post‑employment benefit promises in response to calls for a comprehensive review of the accounting for post‑employment benefit promises to improve the quality and transparency of financial statements. However, a comprehensive project to address all areas of post‑employment benefit accounting could take many years to complete. Nevertheless, the Board recognised a short‑term need to provide users of financial statements with better information about post‑employment benefit promises.

BC5 Accordingly, the Board undertook a limited scope project, and in March 2008 the Board published a discussion paper Preliminary Views on Amendments to IAS 19 Employee Benefits that included the Board's preliminary views on the following areas of IAS 19:

(a) the deferred recognition of some gains and losses arising from defined benefit plans.