PAS 19 Employee Benefits

PROBLEM 1: MULTIPLE CHOICE

1. A
2. C
3. A (8M x 5%) ÷ 6 employees currently employed as at year-end
= 66,667

4. A
5. B
6. C
7. D
8. C
9. C
10. D

PROBLEM 2: FOR CLASSROOM DISCUSSION

1. D [(20 employees x 1 day x 12 months) – 150 days] x ₱1,000 x
105% = 94,500.
The 20% employee turnover rate is irrelevant because the
employee benefits are monetized.

2. D

3. B Solution: 2,900,000 PV of DBO – 2,600,000 FVPA = 300,000

deficit

4. B Solution: 400,000 service cost + 20,000 net interest (see

computations below) = 420,000
5. C
Solution:
Service cost:
(a) Current service cost 400,000
(b) Past service cost -
(c) Any (gain) or loss on settlement -
400,000
Net interest on the net defined benefit liability (asset):
(a) Interest cost on the DBO (2M, beg. x 10%) 200,000
(b) Interest income on plan assets (1.8M, beg. x 10%) (180,000)
(c) Interest on the effect of the asset ceiling -
20,000
Remeasurements of the net defined benefit liability (asset):
(a) Actuarial (gains) and losses 200,000
(b) Difference between interest income on plan assets and
return on plan assets (180,000 – 120,000) 60,000
(c) Difference between the interest on the effect of the asset
-
ceiling and change in the effect of the asset ceiling
260,000
Total Defined Benefit Cost 680,000