This Reporting Update summarises key implications of changing to the high quality corporate bond rate to discount long-term employee benefits like long service leave and defined benefit obligations.
Australia now has a deep market in high quality corporate bonds. KPMG accepts the analysis in the Discount Rates for Australian Employee Benefit Liability Valuation Milliman Report in April 2015, which investigated the Australian high quality bond market and found sufficient evidence to support the above conclusion.
When the high quality corporate bond market is deep, entities (except public not-for-profit sector entities) must change to that rate for all employee benefits measured on a discounted basis under AASB 119 Employee benefits.
Reporting Updates are KPMG's way of communicating changes occurring within the Australian financial reporting environment to our clients.
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