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Employee Benefit Sugar Corporation
Employee Benefit Sugar Corporation
IAS 19
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Definition
Scope
(1)
(2)
Contd
With these plans, the size of the postemployment benefits is determined in advance,
ie the benefits are 'defined'. The employer (and
possibly current employees too) pay contributions
into the plan, and the contributions are invested. The
size of the contributions is set at an amount that is
expected to earn enough investment returns to meet
the obligation to pay the post-employment benefits
If, however, it becomes apparent that the assets in
the fund are insufficient, the employer will be
required to make additional contributions into the
plan to make up the expected shortfall
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Exercises
For each of the following, choose one of: 1) short-term;
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Contd
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Recognition and
Measurement
Accounting for employee benefit costs
IAS 19 is intended to prescribe the following.
(a) When the cost of employee benefits should be
recognized as a liability or an expense
(b) The amount of the liability or expense that should be
recognized
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Contd
As a basic rule, the standard states the following.
A liability should be recognized when an employee has
provided a service in exchange for benefits to be received
by the employee at some time in the future.
Short-term
benefits
employee
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Contd
Contd
19
contd
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Answer
The
short-term
accumulating
paid
absences should be recognized as a cost
in the year when the entitlement arises, ie
in 20X9.
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Post-employment benefits
Accounting Treatments
defined contribution plans
Accounting for payments into defined contribution
plans is straightforward.
The obligation is measured by the amounts
to be contributed for that period.
There are no actuarial assumptions to make.
If the obligation is settled in the current period
(or at least no later than 12 months after the end
of the current period there is no requirement
for discounting.
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Contd
Disclosure requirements
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29
30
Contd
THE
END
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