Part 5 – Chapter 2: Employee benefits (IAS 19) IAS 19 – E MPLOYEE BENEFITS S COPE AND OBJECTIVE Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment. They include (a) Short-term employee benefits, such as wages, salaries and social security contributions, paid annual leave and paid sick leave, profit-sharing and bonuses and non-monetary benefits (such as medical care, housing, cars and free or subsidized goods ore services) for current employees; (b) Post-employment benefits such as retirement benefits and post-employment life insurance and post- employment medical care; (c) Termination benefits; (d) Other long-term employee benefits, such as long-term paid absences (sabbatical leave), jubilee benefits, long-term disability benefits. An entity has to recognise (a) A liability when an employee has provided service in exchange for employee benefits to be paid in the future; and (b) An expense when the entity consumes the economic benefit arising from service provided by an employee in exchange for employee benefits S HORT - TERM EMPLOYEE BENEFITS Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service. P OST - EMPLOYMENT BENEFITS Post-employment benefits are employee benefits (other than termination benefits and short-term employee benefits) that are payable after the completion of employment. Post-employment benefit plans are formal or informal arrangements under which an entity provides post-employment benefits for one or more employees. There are two types of post-employment benefit plans: (a) Defined contribution plans which are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. (b) Defined benefit plans are post-employment benefit plans other than defined contribution plans. D EFINED CONTRIBUTION PLANS
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- Summer '17
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