How does IAS 19 require entities to account for defined benefit pension schemes?

IAS 19 requires the net defined benefit liability or asset to be recognized on the statement of financial position. The accounting components are split by destination:

1. Profit or Loss: Current service cost, past service cost, and net interest expense or income (calculated by applying the discount rate to the net defined benefit liability/asset).
2. Other Comprehensive Income (OCI): Remeasurements, including actuarial gains and losses and the return on plan assets (excluding amounts included in net interest), which are never reclassified to profit or loss.