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Intermediate Accounting > 5 - Employee Benefits Pt. 1 > Flashcards

5 - Employee Benefits Pt. 1 Flashcards

1
Q

PAS for employee benefits

A

PAS 19

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2
Q

PAS for Accounting & Reporting by Retirement Benefit Plans

A

PAS 26

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3
Q

All forms of consideration given by entity in exchange for service rendered by employees or for termination of employment

A

Employee benefits

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4
Q

Include regular, part-time or casual, etc.

A

Employees

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5
Q

Employee benefits are recognized as ___ when employees have rendered service except if employee benefits form part of the cost of another asset.

A

expense

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6
Q

Employee benefits already earned but not yet paid are recognized as ___

A

liabilities

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7
Q

Employee benefits may arise from: (3)

A
  1. Contractual agreements
  2. Legislation
  3. Informal practices that create constructive obligations
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8
Q

4 Categories of Employee Benefits under PAS 19

A

a. Short-term
b. Post-employment
c. Other long-term
d. Termination

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9
Q

Due to be settled within 12 months after end of the period where employees have rendered the related services.

A

Short-term employee benefits

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10
Q

Fixed amount

A

Salaries

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11
Q

Per hour; not fixed

A

Wages

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12
Q

If there is excess payment in the benefits, it is recognized as ___

A

Prepaid asset

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13
Q

Short-term employee benefits are recognized ___

A

periodically

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14
Q

Include vacation, holiday, maternity, paternity, and sick leaves.

A

Short-term absences

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15
Q

Entitlement to paid absences may be either:

A

a. Accumulating
1. Vesting
2. Non-vesting
b. Non-accumulating

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16
Q

Can be carried forward and used in future periods if not used in current period.

A

Accumulating

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17
Q

Unused entitlement paid in cash when employee leaves the entity (monetized)

A

Vesting

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18
Q

Unused entitlement are not monetized

A

Non-vesting

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19
Q

Expire if not used in current period and are not paid in cash when employee leaves the entity

A

Non-accumulating

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20
Q

All unused entitlements are accrued & measured @ their expected settlement amount

A

Accumulating & vesting

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21
Q

Unused entitlements are accrued but taking into account the possibility that employees may leave before they use those entitlements.

A

Accumulating & non-vesting

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22
Q

Unused entitlements are not accrued but recognized only

A

Non-accumulating

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23
Q

Additional incentives given to employees - to motivate the employees to be more productive

A

Profit-sharing and bonus plans

24
Q

Profit sharing and bonuses are recognized when: (2)

A
  1. Entity has a present obligation to pay for them
  2. Cost can be measured reliably
25
Q

Examples of bonus schemes:

A
  1. Before before
  2. After before
  3. Before after
  4. After after
26
Q

Employee benefits that are payable after the completion of employment (except termination & short-term employee benefits)

A

Post-employment benefits

27
Q

Can be formal or informal

A

Post-employment benefit plan

28
Q

Post-employment benefit plan can be:

A

a. Contributory or Non-contributory
b. Funded or Unfunded

29
Q

Post-employment benefits plan is formal if

A

explicitly stated in employment contract

30
Q

Post-employment benefits plan is informal if

A

not documented but implied

31
Q

Both employer & employee contribute to the retirement fund of employee

A

Contributory

32
Q

Only the employer contributes to the retirement fund of employee

A

Non-contributory

33
Q

Retirement fund is isolated from employer’s control and is transferred to a trustee to manage fund and pay directly the retiring employees

A

Funded

34
Q

Employer manages any established fund and pays directly the retiring employees

A

Unfunded

35
Q

Employer commits to make fixed contributions that will be used to pay for the retirement benefits of the employees; risk rests with employee

A

Defined contribution plans

36
Q

Employer commits to pay a definite amount of retirement benefits; risk rests with employer

A

Defined benefit plans

37
Q

Retirement benefits plans that have characteristics of both defined contribution plan and defined benefit plan; considered defined benefit plans

A

Hybrid plans

38
Q

Various unrelated employers contribute to a common fund manage by a trustee to provide post-employment benefits to employees of participating employers; classified as either defined contribution plans or defined benefit plans

A

Multi-employer plans

39
Q

Established by law and operated by the government. It is mandatory for all entities not subject to control/influence by entity; classified as either defined contribution plans or defined benefit plans

A

State plansa

40
Q

Covers government employees

A

Government Service Insurance System (GSIS)

41
Q

Covers private sector

A

Social Security System (SSS)

42
Q

Types of Retirement Benefits:

A
  1. Lifetime monthly pension
  2. Lump sum account
43
Q

Retiree who has paid at least 120 monthly contributions prior to retirement

A

Lifetime monthly pension

44
Q

Retiree who has not paid the required 120 monthly contributions

A

Lump sum amount

45
Q

A retiree has the option to receive in advance the first ___ monthly pension in lump sum.

A

18

46
Q

Based on the contributions paid, credited years of service and number of dependent minor children not to exceed five.

A

Monthly pension

47
Q

Equal to the total contributions paid by the member and by the employer including interest

A

Lump sum

48
Q

Upon death of retiree, primary beneficiaries are entitled to ___ of the monthly pension & dependents to the ‘dependents’ pension.

A

100%

49
Q

Compulsory retirement age

A

60-65 years

50
Q

Retirement Pay Law

A

R.A. 7641

51
Q

R.A. 7641

A

Retirement Pay Law

52
Q

Employer may pay insurance premiums to fund a post-employment benefit plan; either defined contribution plan or defined benefit plan.

A

Insured Benefits

53
Q

Accounting for defined contribution plan recognizes contribution as ___ and ___ when employees have rendered service.

A

expense; liability

54
Q

If defined contribution plan is due within 12 months, it is measured ___

A

@ an undiscounted amount

55
Q

If defined contribution plan is due beyond 12 months it is

A

discounted

56
Q

Assumes obligation of paying the retiring employee

A

Trustee

57
Q

According to PAS 19, in the absence of a retirement plan, entities are subject to the ___

A

minimum requirement of the law

Intermediate Accounting (6 decks)

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