BC256 IAS 19 requires an entity to account for termination benefits separately from other employee benefits, because the event that gives rise to a present obligation is the termination of employment rather than employee service. In contrast, FASB ASC Topic 420 regards some involuntary termination benefits as being provided in exchange for employees' future services (or, expressed another way, a 'stay bonus'). In such cases under US GAAP, an entity recognises the cost of those benefits over the period of the employees' service, consistently with the accounting for other employee benefits.
BC257 In the 2005 ED, the Board proposed that IAS 19 should specify recognition requirements for an entity providing termination benefits in exchange for future service, consistent with Topic 420. However, when finalising the amendments made in 2011, the Board noted the potential for confusion caused by accounting for some benefits provided in exchange for future service as termination benefits. The B
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