Nippon Sheet Glass Company Limited – Annual report – 31 March 2019
Industry: manufacturing
1.2. Changes in accounting policies and disclosures (extract)
From the Group’s financial period commencing 1 April 2018, the Group has early-adopted an amendment to IAS 19 ‘Employee benefits’ regarding plan amendments, curtailments or settlements that would otherwise have been applicable to the Group’s financial periods commencing from 1 April 2019. This requires that, in the event of a plan amendment, curtailment or settlement, at one of the Group’s post-retirement benefit schemes, the Group will update the actuarial assumptions determining current service cost and finance cost as at the date of the plan amendment, curtailment or
settlement. The previous accounting treatment would have been to continue to calculate current service costs and finance costs using actuarial assumptions set from the start of the financial period. The financial effect of adopting this amended approach as at 31 March 2019 is to reduce operating costs by ¥22 million and to reduce finance costs by ¥57 million. This change in accounting treatment is applicable to UK pension schemes only, due to the past service cost recorded for these schemes during the third quarter. This past service cost is generated from the equalization of guaranteed minimum pensions recorded as an exceptional item (note 7) during the third quarter.
7. Exceptional items (extract)
The past service cost on retirement benefit obligations relates to a court ruling in the U.K. regarding Guaranteed Minimum Pensions (GMP’s). Following this judgement, U.K. pension schemes are required to equalize benefits in excess of the GMP as between male and female scheme members for the period between 1990 and 1997. GMP’s represent an element of the Group’s pension liability which was designed to substitute for pension benefits that would otherwise have been provided by the state, with the state-provided pension benefits being unequal between men and women resulting in inequality of the scheme-provided benefit. The exceptional item recognized consists of a gross charge of ¥2,144 million and a credit with respect to taxation on pension surplus of ¥759 million.
Accounts examples 