IAS 19 Employee Benefits

Question 1

Defined Contribution plans

Answer 1

• Employer make annual fixed contribution to the fund and benefits payable based on the investment
• There is no obligation created
• The contribution made is deducted from cash and expensed to SOPL

Question 2

Defined benefit plans

Answer 2

Benefits paid is to be calculated which depends on employee’s pay and serving terms from which the annual contribution is determined using project unit credit method

Question 3

When to recognise basic settlement of terminated employees?

Answer 3

IAS 19 Employee Benefits requires such payments to be recognised at the earlier of when the plan of termination is announced and when the entity recognises the associated restucturing costs with the closure of department ie.

Should be recognised on the service cost PnL