Employee Benefits IAS 19 Objective and Scope

Last Updated on 23/02/2020 by 75385885

IAS 19 Employee BenefitsIFRS 3AG Transition for Mutual entities and Contract alone

IAS 19 Objective and Scope

Objective IAS 19 Objective and Scope

1 The objective of this Standard is to prescribe the accounting and disclosure for employee benefits. The Standard requires an entity to recognise:

  1. a liability when an employee has provided service in exchange for employee benefits to be paid in the future; and
  2. an expense when the entity consumes the economic benefit arising from service provided by an employee in exchange for employee benefits.

Scope

2 This Standard shall be applied by an employer in accounting for all employee benefits, except those to which IFRS 2 Share-based Payment applies.

3 This Standard does not deal with reporting by employee … Read more

IAS 19 Definitions

Last Updated on 19/02/2020 by 75385885

IAS 19 Employee BenefitsIAS 19 Definitions

IAS 19 Definitions

8 The following terms are used in this Standard with the meanings specified:

Definitions of employee benefits

Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment.

Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service.

Post-employment benefits are employee benefits (other than termination benefits and short-term employee benefits) that are payable after the completion of employment.

Other long-term employee benefits are all employee benefits other … Read more

IAS 19 Short-term employee benefits

Last Updated on 28/01/2020 by 75385885

IAS 19 Employee BenefitsIAS 19 Short-term employee benefits

IAS 19 Short-term employee benefits

9 Short-term employee benefits include items such as the following, if expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related services:

  1. wages, salaries and social security contributions;
  2. paid annual leave and paid sick leave;
  3. profit-sharing and bonuses; and
  4. non-monetary benefits (such as medical care, housing, cars and free or subsidised goods or services) for current employees.

10 An entity need not reclassify a short-term employee benefit if the entity’s expectations of the timing of settlement change temporarily. However, if the characteristics of the benefit change (such as a change from a … Read more

IAS 19 Defined contribution and defined benefit plans

Last Updated on 19/02/2020 by 75385885

IAS 19 Employee BenefitsIAS 19 Defined contribution and defined benefit plans

IAS 19 Defined contribution and defined benefit plans

Post-employment benefits: distinction between defined contribution plans and defined benefit plans

26 Post-employment benefits include items such as the following:

  1. retirement benefits (eg pensions and lump sum payments on retirement); and
  2. other post-employment benefits, such as post-employment life insurance and post-employment medical care.

Arrangements whereby an entity provides post-employment benefits are post-employment benefit plans. An entity applies this Standard to all such arrangements whether or not they involve the establishment of a separate entity to receive contributions and to pay benefits.

27 Post-employment benefit plans are classified as either defined contribution plans or defined benefit plans, depending on the economic substance of … Read more

IAS 19 Post-employment benefits defined contribution plans

Last Updated on 19/02/2020 by 75385885

IAS 19 Employee BenefitsIAS 19 Post-employment benefits defined contribution plans

IAS 19 Post-employment benefits defined contribution plans

50 Accounting for defined contribution plans is straightforward because the reporting entity’s obligation for each period is determined by the amounts to be contributed for that period. Consequently, no actuarial assumptions are required to measure the obligation or the expense and there is no possibility of any actuarial gain or loss. Moreover, the obligations are measured on an undiscounted basis, except where they are not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service.

Recognition and measurement

51 When an employee has rendered service to an entity during … Read more

IAS 19 Post-employment benefits defined benefit plans

Last Updated on 19/02/2020 by 75385885

IAS 19 Employee BenefitsIAS 19 Post-employment benefits defined benefit plans

IAS 19 Post-employment benefits defined benefit plans

55 Accounting for defined benefit plans is complex because actuarial assumptions are required to measure the obligation and the expense and there is a possibility of actuarial gains and losses. Moreover, the obligations are measured on a discounted basis because they may be settled many years after the employees render the related service.

Recognition and measurement

56 Defined benefit plans may be unfunded, or they may be wholly or partly funded by contributions by an entity, and sometimes its employees, into an entity, or fund, that is legally separate from the reporting entity and from which the employee benefits are paid. The payment … Read more

IAS 19 Other long-term employee benefits

Last Updated on 19/02/2020 by 75385885

IAS 19 Employee benefitsIAS 19 Other long-term employee benefits

IAS 19 Other long-term employee benefits

153 Other long-term employee benefits include items such as the following, if not expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service:

  1. long-term paid absences such as long-service or sabbatical leave;
  2. jubilee or other long-service benefits;
  3. long-term disability benefits;
  4. profit-sharing and bonuses; and
  5. deferred remuneration.

154 The measurement of other long-term employee benefits is not usually subject to the same degree of uncertainty as the measurement of post-employment benefits. For this reason, this Standard requires a simplified method of accounting for other long-term employee benefits. Unlike the accounting required … Read more

IAS 19 Termination benefits

Last Updated on 19/02/2020 by 75385885

IAS 19 Employee benefitsIAS 19 Termination benefits

IAS 19 Termination benefits

159 This Standard deals with termination benefits separately from other employee benefits because the event that gives rise to an obligation is the termination of employment rather than employee service. Termination benefits result from either an entity’s decision to terminate the employment or an employee’s decision to accept an entity’s offer of benefits in exchange for termination of employment.

160 Termination benefits do not include employee benefits resulting from termination of employment at the request of the employee without an entity’s offer, or as a result of mandatory retirement requirements, because those benefits are post-employment benefits. Some entities provide a lower level of benefit for termination … Read more

IAS 19 Appendix A Application Guidance

Last Updated on 28/01/2020 by 75385885

IAS 19 Employee benefitsIAS 19 Appendix A Application Guidance

IAS 19 Appendix A Application Guidance

This appendix is an integral part of the IFRS. It describes the application of paragraphs 92–93 and has the same authority as the other parts of the IFRS.

A1 The accounting requirements for contributions from employees or third parties are illustrated in the diagram below.

IAS 19 Appendix A Application Guidance


For reference here are the paragraphs 92–93:

92 Some defined benefit plans require employees or third parties to contribute to the cost of the plan. Contributions by employees reduce the cost of the benefits to the entity. An entity considers whether third-party contributions reduce the cost of the benefits to the entity, or are a reimbursement right as described in paragraph Read more