IAS

19 EMPLOYEE BENEFITS (REVISED-2011)

TERMS
Employee Benefits
All forms of consideration given by an entity in exchange for
services rendered or for the termination of employment.
SHORT-TERM EMPLOYEE BENEFITS
Those expected to be settled wholly within the 12 months after
the reporting period end, in which the employee has rendered
the related services.
No need to reclassify if timing of settlement changes.
Compensated absences (e.g. sick leave)
Accumulating expense when service that increases

entitlement is rendered. e.g. leave pay

Non-accumulating expense when absence occurs.

All short term benefits

Recognise undiscounted amount as an expense/liability
(e.g. wages, salaries, bonuses, etc. )
BONUS/PROFIT-SHARING SCHEMES
Recognise the expense when entity has a present legal or
constructive obligation to make payments; and a reliable
estimate of the obligation can be made.

POST-EMPLOYMENT BENEFITS
Employee benefits payable after the completion of
employment (excluding termination and short term benefits),
such as:
Retirement benefits (e.g. pensions, lump sum payments)

Other post-employment benefits (e.g. post employment

life insurance, medical care).

Defined Contribution Plan (DCP)
The entity pays fixed contributions into a fund and does not
have an obligation to pay further contributions if the fund does
not hold sufficient assets
Recognise the contribution expense /liability when the

employee has rendered the service.

Defined Benefit Plan (DBP)
Post employment plans other than defined contribution plans.
Statement of financial position
Recognise the net defined benefit liability/(asset) in the
statement of financial position (being equal to the deficit
(surplus) in the defined benefit plan and the possible effect of
the asset ceiling).

When an entity has a surplus in a DBP, measure the net

defined benefit asset at the lower of:
The surplus in the defined benefit plan
TERMINATION BENEFITS

The asset ceiling (i.e. PV of any economic benefits

Employee benefits provided in exchange for the termination of
available in the form of refunds from the plan or reductions
an employees employment, as a result of either:
in future contributions to the plan), determined using
a) An entitys decision to terminate an employees employment
appropriate discount rate.
before the normal retirement date
b)An employees decision to accept an offer of benefits in
Statement of comprehensive income
exchange for the termination of employment.
Recognise actuarial gains/losses in OCI in the period in
Recognise liability and expense at the earlier of:

which they occur.

The date the entity can no longer withdraw the benefit or

Past-service-costs are recognised in P&L in the period

offer

incurred.
The date the entity recognises restructuring costs under

Net interest on defined benefit liability/(asset) is

IAS 37.

recognised in P&L.
If termination benefits settled wholly before 12 months

o Represents unwinding of discount on DBP

from reporting date apply requirements for short-term
liability/(asset) from passage of time.
employee benefits
o Multiply DBP liability/(asset) by discount rate;
If termination benefits are not settled wholly before 12

adjust for actual contributions and benefits paid

months from reporting date apply requirements for other
in period
long term employee benefits.

Defined Benefit Cost (3 components)
OTHER LONG-TERM EMPLOYEE BENEFITS
Service cost (current, past, curtailment loss/(gain), and

Employee benefits other than short-term employee benefits,

settlement loss/(gain) in P&L
post-employment benefits, and termination benefits.
Net Interest (see above) in P&L

Remeasurements (actuarial gains, the return on plan

Statement of financial position

assets (excl. net interest), change in the effect of the asset
Carrying amount of liability = PV of obligation minus the

ceiling) in OCI
fair value of any plan assets
Actuarial gains and losses (OCI) and past service costs

Multi-employer Plans
(P&L are recognised immediately and in full in the SOCI.
These are post-employment plans other than state plans

that pool the assets of various entities that are not under
Statement of comprehensive income
common control and use those assets to provide benefits
Recognise the net total of: Current service cost + Net interest
to employees of more than one entity
on net defined benefit liability/(asset) + remeasurement of the
May be a DCP or DBP

net defined benefit liability/(asset).

If the plan is a DBP, an entity may apply defined

contribution accounting when sufficient information is not

available to apply the accounting requirements for DBPs.
EFFECTIVE DATE
Accounting periods beginning on or after 1 Jan 2013

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