Amended version of IAS 19 issued in 2011 Show IAS 19 Employee Benefits (2011) is an amended version of, and supersedes, IAS 19 Employee Benefits (1998), effective for annual periods beginning on or after 1 January 2013. The summary that follows refers to IAS 19 (2011). Readers interested in the requirements of IAS 19 Employee Benefits (1998) should refer to our summary of IAS 19 (1998). Changes introduced by IAS 19 (2011) as compared to IAS 19 (1998) include:
The objective of IAS 19 is to prescribe the accounting and disclosure for employee benefits, requiring an entity to recognise a liability where an employee has provided service and an expense when the entity consumes the economic benefits of employee service. [IAS 19(2011).2] IAS 19 applies to (among other kinds of employee benefits):
IAS 19 (2011) does not apply to employee benefits within the scope of IFRS 2 Share-based Payment or the reporting by employee benefit plans (see IAS 26 Accounting and Reporting by Retirement Benefit Plans). Short-term employee benefits are those expected to be settled wholly before twelve months after the end of the annual reporting period during which employee services are rendered, but do not include termination benefits.[IAS 19(2011).8] Examples include wages, salaries, profit-sharing and bonuses and non-monetary benefits paid to current employees. The undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in an accounting period is recognised in that period. [IAS 19(2011).11] The expected cost of short-term compensated absences is recognised as the employees render service that increases their entitlement or, in the case of non-accumulating absences, when the absences occur, and includes any additional amounts an entity expects to pay as a result of unused entitlements at the end of the period. [IAS 19(2011).13-16] An entity recognises the expected cost of profit-sharing and bonus payments when, and only when, it has a legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the expected obligation can be made. [IAS 19.19] Post-employment benefit plans are informal or formal arrangements where an entity provides post-employment benefits to one or more employees, e.g. retirement benefits (pensions or lump sum payments), life insurance and medical care. The accounting treatment for a post-employment benefit plan depends on the economic substance of the plan and results in the plan being classified as either a defined contribution plan or a defined benefit plan:
For defined contribution plans, the amount recognised in the period is the contribution payable in exchange for service rendered by employees during the period. [IAS 19(2011).51] Contributions to a defined contribution plan which are not expected to be wholly settled within 12 months after the end of the annual reporting period in which the employee renders the related service are discounted to their present value. [IAS 19.52] Basic requirements An entity is required to recognise the net defined benefit liability or asset in its statement of financial position. [IAS 19(2011).63] However, the measurement of a net defined benefit asset is the lower of any surplus in the fund and the 'asset ceiling' (i.e. the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan). [IAS 19(2011).64] Measurement The measurement of a net defined benefit liability or assets requires the application of an actuarial valuation method, the attribution of benefits to periods of service, and the use of actuarial assumptions. [IAS 19(2011).66] The fair value of any plan assets is deducted from the present value of the defined benefit obligation in determining the net deficit or surplus. [IAS 19(2011).113] The determination of the net defined benefit liability (or asset) is carried out with sufficient regularity such that the amounts recognised in the financial statements do not differ materially from those that would be determined at end of the reporting period. [IAS 19(2011).58] The present value of an entity's defined benefit obligations and related service costs is determined using the 'projected unit credit method', which sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately in building up the final obligation. [IAS 19(2011).67-68] This requires an entity to attribute benefit to the current period (to determine current service cost) and the current and prior periods (to determine the present value of defined benefit obligations). Benefit is attributed to periods of service using the plan's benefit formula, unless an employee's service in later years will lead to a materially higher of benefit than in earlier years, in which case a straight-line basis is used [IAS 19(2011).70] Actuarial assumptions used in measurement The overall actuarial assumptions used must be unbiased and mutually compatible, and represent the best estimate of the variables determining the ultimate post-employment benefit cost. [IAS 19(2011).75-76]:
* Added by Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) in February 2018. The amendments are effective for annual periods beginning on or after 1 January 2019. Past service costs Past service cost is the term used to describe the change in a defined benefit obligation for employee service in prior periods, arising as a result of changes to plan arrangements in the current period (i.e. plan amendments introducing or changing benefits payable, or curtailments which significantly reduce the number of covered employees) . Past service cost may be either positive (where benefits are introduced or improved) or negative (where existing benefits are reduced). Past service cost is recognised as an expense at the earlier of the date when a plan amendment or curtailment occurs and the date when an entity recognises any termination benefits, or related restructuring costs under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. [IAS 19(2011).103] Gains or losses on the settlement of a defined benefit plan are recognised when the settlement occurs. [IAS 19(2011).110] Before past service costs are determined, or a gain or loss on settlement is recognised, the net defined benefit liability or asset is required to be remeasured, however an entity is not required to distinguish between past service costs resulting from curtailments and gains and losses on settlement where these transactions occur together. [IAS 19(2011).99-100] Recognition of defined benefit costs The components of defined benefit cost is recognised as follows: [IAS 19(2011).120-130]
Other guidance IAS 19 also provides guidance in relation to:
Disclosures about defined benefit plans IAS 19(2011) sets the following disclosure objectives in relation to defined benefit plans [IAS 19(2011).135]:
Extensive specific disclosures in relation to meeting each the above objectives are specified, e.g. a reconciliation from the opening balance to the closing balance of the net defined benefit liability or asset, disaggregation of the fair value of plan assets into classes, and sensitivity analysis of each significant actuarial assumption. [IAS 19(2011).136-147] Additional disclosures are required in relation to multi-employer plans and defined benefit plans sharing risk between entities under common control. [IAS 19(2011).148-150]. IAS 19 (2011) prescribes a modified application of the post-employment benefit model described above for other long-term employee benefits: [IAS 19(2011).153-154]
A termination benefit liability is recognised at the earlier of the following dates: [IAS 19.165-168]
Termination benefits are measured in accordance with the nature of employee benefit, i.e. as an enhancement of other post-employment benefits, or otherwise as a short-term employee benefit or other long-term employee benefit. [IAS 19(2011).169] Which of the following are examples of how do you keep your technology devices secure?Follow these tips to protect your devices and safeguard your sensitive data:. Use a firewall. ... . Install antivirus software. ... . Install an anti-spyware package. ... . Use complex passwords. ... . Keep your OS, apps and browser up-to-date. ... . Ignore spam. ... . Back up your computer. ... . Shut it down.. Which of the following best describe the auditing and monitoring programs of the Sdap?Which of the following best describe the auditing and monitoring programs of the Sales Development Action Program (SDAP)? Sales Integrity monitors data pertaining to the sale of Cigna products and potential violations of state, federal or Cigna policy.
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