PAS 19 EMPLOYEE BENEFITS

NATURE:

- Consideration given by an entity in exchange for services rendered by employee or for the termination
of employment

1. Short term employee benefit

2. Post-employment benefits
3. Other long term employee benefits
4. Termination benefits

RECOGNITION & MEASUREMENT:

- Fairly Straight forward

- Undiscounted basis

ACCOUNTING/ PRESENTATION

1. Unpaid short-term benefits – accrued expenses

2. Paid benefits (short term) – prepayment

Accumulating Paid absences Nonaccumulating Paid absences

Carried forward Not carry forward
Can be use in future periods
1. Vesting – cash payment
2. Non vesting -

POST EMPLOYMENT BENEFITS

- Payable after the completion of employment – retirement

1. Defined Contribution Plan
 Pays fixed contribution into separate entity (fund)
 Definite contribution but benefit is indefinite
 Employee bears the risk
Accounting Recognition:
Record Expense on period it is payable
Accrued expense on any unpaid contribution at the end of period
Prepaid Expense, excess contribution to the extent of prepayment will lead to cash
refund

2. Defined Benefit Plan

 Postemployment benefit plan other than defined contribution plan
 Obligated to provide agreed benefits to employee
 Employee is guaranteed
 Definite benefit but indefinite contribution
Accounting Recognition:
Actuarial assumptions
Discounted basis measurement
Can be unfunded. Fully funded, partly funded
Expensed recognized is not necessarily the amount of contribution for the
period
 PAS 19 EMPLOYEE BENEFITS

Components of defined benefit cost

Service Cost Current service Cost

Past service Cost
Any gain or loss on plan settlement
Net Interest 1. Interest expense on deferred benefit obligation

2. Interest income on plan assets

3. Interest expense on effect of asset ceiling

Remeasurements

DISCLOSURE