Nonretirement Postemployment Benefits

Question 1

What basis of accounting is used for recognizing expense for nonretirement postemployment benefits?

Answer 1

The basis is Accrual

Question 2

List the conditions under which the accrual of a liability for postemployment benefits is necessary

Answer 2

1. )When the benefits meet the four criteria of “Accounting for Compensated Absences;” also
2. )When the benefits do not meet those four criteria, then “Accounting for Contingencies” is followed.

Question 3

List the criteria for recognition of nonretirement postemployment benefits on the accrual basis

Answer 3

Obligation attributable to employee services already rendered; rights vest or accumulate; payment is probable; amount is estimable

Question 4

When is the accrued amount for nonretirement postemployment benefits less than the total benefit earned by employees?

Answer 4

When not all earned benefits are expected to be paid