ACCT2011WEEK7-CHP13EMPLOYEE BENEFIT - CHP13 Accounting for...

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CHP13 Accounting for employee benefits week 7 0. Introduction 1. Employee: a natural person (including a director) appointed or engaged under a contract for services who is subject to the direction of an employer in respect of the manner of exception of those services, whether on a full-time, part-time, permanent, casual, or temporary basis. 2. AASB119 Para7 employee benefit: a lll forms of consideration given by an entity in exchange for service rendered by employees. 3. Wages and salaries: wages were paid for manual labour, while salary were paid for others. 4. Annual leave: most full-time employees are entitled to a specified number of weeks of paid annual leave each year, commonly in australia is 4 weeks. 5. Sick leave: sick leave can be classified as cumulative and non-cumulative. cumulat - ive: continue to accrue until employment cease. non-cumulative:lapse if not taken. vesting sick leave can be paid out, if it lapses it is non-vesting. whether or not un - used sick leave is paid out on resignation or retirement will have direct implication - s for how the employer accounts for employee sick-leave entitlement. 6. Long-service leave:additional leave over or above their annual leave if they stay with a particular firm for a minimum number of periods. 7. AASB119 divides employee benefits into a number of categories: A. short-term employee benefits (wages, salaries, sick leave, annual leave, social security contributions) AASB 119 defines 'short-term employee benefits' as employee benefits other than termin - ation benefits which fall due wholly within 12 months after the end of the period in which the employees render the related service. Short-term employee benefits measurement: AASB 119 para 10: when an employee rendered services to an entity during a reporting period, the entity should recognise the undercounted amount of short-term employee be - nefits expected to be paid in exchange for that services: 1. as a liability (accrued ecpn), after deducting any amount already paid. If the amount already paid > the undiscounted amount of the benefits, an entity should recognise that ex - cess as an assets (prepaid expn) to the extent that the pre - payment will lead to. 2. as an expn unless another Australian Accounting Standards requires or permits the inclusion of the benefits in the cost of an assets B. post-employee benefits (X) C. termination benefits (X) D. other long-term employee benefits (Long-term service leave) A. for that benefits do not fall into the 12 months of the end of the period in which the employee renders the related services AASB119 requires that the related obligations be discounted to their present value. The discounted rate
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This note was uploaded on 06/30/2011 for the course ACCT 2011 taught by Professor D during the Three '11 term at University of Sydney.

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ACCT2011WEEK7-CHP13EMPLOYEE BENEFIT - CHP13 Accounting for...

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