Employee Benefits (Pas 19)
Chapter 9 – Employee Benefits
Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees. PAS 19 prescribes the accounting and disclosure by employers for employee benefits. Such benefits included in the standard are short-term employee benefits, postemployment benefits, long-term employee benefit, and termination benefits.
1) Short-term employee benefits – employee benefits other than termination benefits which fall due wholly within twelve months after the end of the period in which the employees render the related service. These benefits include: a. Salaries, wages and social security contribution b. Short-term compensated absences such as paid annual leave and sick leave (entitlement to compensated absences falls into two categories: accumulating and nonaccumulating absences. The former are those that are carried forward and can be used in future periods if the current period’s entitlement is not used in full, may either be vesting or being entitled to a cash payment for unused entitlement, or nonvesting or being not entitled to cash payment. The latter category are those that do not carry forward, they lapse if the current period’s entitlement is not used and do not entitle the employees to a cash payment for unused entitlement.) c. Profit sharing and bonuses payable within twelve months (cost of profit-sharing and bonus plans shall be recognized by an entity when it has a present or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made.) d. Nonmonetary benefits such as medical care, housing, car and free or subsidized goods
Accounting for short-term benefits and its principles: a. No actuarial assumptions to be made and there is no requirement to discount future benefits because they’re all payable no later than twelve months after the end of current reporting period. b. Short-term benefits are
Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees. PAS 19 prescribes the accounting and disclosure by employers for employee benefits. Such benefits included in the standard are short-term employee benefits, postemployment benefits, long-term employee benefit, and termination benefits.
1) Short-term employee benefits – employee benefits other than termination benefits which fall due wholly within twelve months after the end of the period in which the employees render the related service. These benefits include: a. Salaries, wages and social security contribution b. Short-term compensated absences such as paid annual leave and sick leave (entitlement to compensated absences falls into two categories: accumulating and nonaccumulating absences. The former are those that are carried forward and can be used in future periods if the current period’s entitlement is not used in full, may either be vesting or being entitled to a cash payment for unused entitlement, or nonvesting or being not entitled to cash payment. The latter category are those that do not carry forward, they lapse if the current period’s entitlement is not used and do not entitle the employees to a cash payment for unused entitlement.) c. Profit sharing and bonuses payable within twelve months (cost of profit-sharing and bonus plans shall be recognized by an entity when it has a present or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made.) d. Nonmonetary benefits such as medical care, housing, car and free or subsidized goods
Accounting for short-term benefits and its principles: a. No actuarial assumptions to be made and there is no requirement to discount future benefits because they’re all payable no later than twelve months after the end of current reporting period. b. Short-term benefits are