Employee Benefits

(ToA.1922)

R. C. GLORIA
Relevant Standard

• PAS 19R – Employee Benefits

(Effective 01.01.13)
What are employee benefits?

Employee benefits are all forms of

consideration given by an
entity in exchange for service
rendered by employees or for
termination of employment.
Types of employee benefits
• Post-employment

• Other long term

• Termination

• Short term
What are post-employment
benefits?

Post-employment benefits are

employee benefits (other than
termination benefits and short-
term employee benefits) which
are payable after the
completion of employment.
Types
Types post-employment
post-employment benefit
benefit plans
plans
Defined contribution plan
• The entity pays fixed contributions into a
fund but has no legal or constructive
obligation to make further payments if the
fund does not have sufficient assets to pay
all of the employees' entitlements.
• Expense = Required contribution
• Discounted if not due to be settled within
12 months

Defined benefit plan

Is a post-employment benefit plan other than a
defined contribution plan.
Defined
Defined Contribution
Contribution vs.
vs.
Defined
Defined Benefit
Benefit Plan
Plan
Accounting
Accounting for
for Defined
Defined Benefit
Benefit Plans
Plans
Accounting involves the following steps:

a) determining the deficit or surplus.

b) determining the amount of the net defined

benefit liability (asset) as determined in
(a), adjusted for any effect of limiting a
net defined benefit asset to the asset
ceiling.

c) determining amounts to be recognised in

profit or loss.
d) determining the remeasurements of the
net defined benefit liability (asset), to be
recognised in other comprehensive
income.
 PAS 19R defines
Defined benefit cost service costs as
Netincluding:
interest expense
Components of
• Current (income)
service
remeasurements
costs
in OCI:
=
•• Past service
Actuarial costs
gains and
Netor
• losses
Gains defined
on PBO on
losses
• non-routine
benefit
Diff. liability
between
settlements
actual(asset),
returnbeg.on
plan assets–and
(DBO/PBO FVPA)
interest income
• Changes X in the
asset ceiling
Discount rate, beg.
(outside of any
changes recorded
as net interest)
Defined
Defined Benefit
Benefit Plans
Plans –– Old
Old vs
vs New
New
 QUIZZER
(ToA.MC15)