IND AS 19 - Employee Benefits

Question 1

From the following items, identify what must be classified as other long-term benefits under Ind AS 19?

1: Paid maternity leave

2 : Cash bonus payable in August 20X3 for results obtained up to 31st March, 20X3

3: Deferred compensation payable 20 months after the period in which it is earned

4: Lump sum retirement benefit of 10 lakh that vests after five years of service

Answer 1

Deferred compensation payable 20 months after the period in which it is earned

Question 2

How should we treat maternity or paternity leaves while accruing liability for compensated absences as per actuarial valuation?

1: Depends on accounting policy of the company

2: Should be included for actuarial valuation

3: Should not be included for actuarial valuation

4 : Only maternity leaves should be included for actuarial valuation

Answer 2

Should not be included for actuarial valuation

Question 3

While accounting for a defined benefit obligation, there is net interest to be recognized in profit or loss. Based on the prevailing accounting practices, which of the following statement is true?

1 : Net interest cost shall be recognized as ‘employee benefit expenses’ in the statement of profit or loss

2 : Net interest cost shall be recognized as ‘finance cost’ in the statement of profit or loss

3 : Net interest cost shall be recognized as ‘other expenses’ in the statement of profit or loss

4: The Company has an accounting policy choice of recognizing net interest cost either in ‘employee benefit expenses’ or ‘finance cost’

Answer 3

The Company has an accounting policy choice of recognizing net interest cost either in ‘employee benefit expenses’ or ‘finance cost’

Question 4

While recognizing the expenses for paid leave to employees which are carried forward to next year if unutilized. An employee can utilize such carry forward leaves anytime subject to maximum of 30 accumulated leaves. How should the Company recognize re-measurement of liability comprising the actuarial gain/loss?

1 : In the statement of profit or loss

2: In other comprehensive income as item to be reclassified to profit or loss

3: In other comprehensive income as item not to be reclassified to profit or loss

4 : Directly in equity

Answer 4

In the statement of profit or loss