Q&A-EMPLOYEES BENEFITS-1
1 WHAT IS THE APPLICABLE
ACCOUNTING STANDARS FOR
EMPLOYEE BENEFITS?
2 Define employee benefits
3 What are the inclusions of
employee benefits?
4 Differentiate the 4 types of
employee benefits.
5 Define short-term employee
benefits
6 Give 4 examples of short-term
employees benefits
7 When is the time for an entity to
recognize Short-term employees
benefit?
8 What is the measurement in
recording employee’s benefits?
9 Explain undiscounted amount
10 If the entity’s expectation of the
timing of settlement change
temporarily, it need not classify an
S-TEB. Explain
11 Compensated absences
• Mandated by law
ACCOUNTING IAS/PAS 19R
All forms of considerations given by an entity in exchange
for services rendered or for the termination of
employment.
1. short-term employee benefits
2. post-employment benefits
3. Other long-term employee benefits
4. termination benefits
1. SHORT-TERM EMPLOYEE BENEFITS
- within 12 months
- for current employees
2. POST-EMPLOYMENT EMPLOYEE BENEFITS
- after completion of employment
- other than termination benefits
3. OTHER LONG-TERM EMPLOYEE BENEFITS
- residual category
- for current employees
4. TERMINATION BENEFITS
- result of termination before retirement
Are employee benefits (other than termination benefits)
that are expected to be settled wholly before 12 months
after the end of the annual reporting in which are
employees render the related services.
1. Wages, salaries and social security contributions
2. Compensated absences (paid vacation and sick leave)
3. Profit sharing and bonuses
4. Non-monetary benefits
ACCOUNTING:
Asset/Expense (Debit) xxx
Liability/Cash (Credit) xxx
When the employee has rendered service to an entity
during n accounting period.
Undiscounted amount
At face value, as is.
If settlement is delayed, but change is temporary, no need
to reclassify.
Sick leave and vacation leave.
 • Initiated by entity
12 What are the 2 classifications of
paid absences? Differentiate the
two.
13 Differentiate Vesting and Non-
Vesting under accumulating paid
absences
14 When do entities recognize
obligation on accumulating paid
absences?
15 How are accumulating paid
absences measured?
16 Explain Non- Accumulating paid
Absences (NAPAS)
17 When do we recognize NON-
ACCUMULATING PAID ABSENCES?
1. Accumulating-recognize expense when service that
increases entitlement is rendered (example. Leave pay)
carry forward.
2. Non-accumulating- recognize expense when absence
occurs. Not carried forward.
1. vesting- employees are entitled to cash payment for
unused entitlement on leaving the entity
2. Non-vesting- employees are not entitled to cash
payment for unused entitlement on leaving the entity.
Obligation arises as employees render service that
increases their entitlement to future paid absences. The
obligation exists, and is recognized even if the paid
absences are non-vesting.
An entity shall measure the expected cost of accumulating
paid absences as the additional amount that the entity
expects to pay as a result of the unused entitlement that
has accumulated at the end of the operating period.
None—accumulating paid absences lapse if the current
period’s entitlement is not used in full and do not entitle
employees to a cash payment for unused entitlement on
leaving the entity. This is commonly the case for:
1. Sick pay (to the extent that unused past
entitlement does not increase future entitlement)
2. Maternity or Paternity leave
3. Paid absences for jury service or military service
An entity recognizes no liability or expense until the time
of the absences, because employee service does not
increase the amount of the benefit.