IAS 19 Employee Benefits

S-501 AFACR
1. IAS 19 Employee benefits June 2009 Q-2c (Marks 08)
Falah Limited operates a pension fund, which covers all of its employees. Thepresent
valueof the obligation and the fair value of plan assets at January 1, 2008were Rs.15 million
andRs.16.7 million respectively.
The actuarial assumptions used by the actuary are as follows:
 Discount rate 12%

 Expected return on plan assets 15%
During the year ended December 31, 2008 the company made contribution in the fund
amounting to Rs.13.75 million and paid benefits to outgoing employees amounting to
Rs.11.25million. Current service cost for the year ended December31, 2008 is Rs.9.55
million.
During the year, plan was amended to provide additional benefits with effect from January 1,
2007. The present value as at December 31, 2007 of additional benefits for employee
service rendered before January 1, 2008 was Rs.4.05 million for vested benefits.
Net cumulative unrecognized actuarial gain at January 1, 2008 was Rs.3.95 million. The
expected average remaining working life of employees is 15 years. The present value of the
obligation and the fair value of plan assets at December31, 2008 were Rs.21.70 million and
Rs.24.50 million respectively.
Required: Calculate:
(i) Actuarial gain/ loss to be recognized as at December 31, 2008. (Marks 02)
(ii) Net cumulative unrecognized actuarial gain at December 31, 2008. (Marks 04)
(iii) Actual return on plan assets for the year ended December 31, 2008. (Marks 02)
2. IAS 19 Employee benefits June 2009 Q-2a (Marks 04)
Define the following terms as per IAS 19 Employee Benefits:
(i) Defined contribution plan (Marks 02)

(ii) Actuarial gains and losses (Marks 02)
3. IAS 19 Employee benefits June 2010 Q-4a (Marks 05)
As per IAS 19, how should the net cumulative unrecognised actuarial gains and losses at the
end of the previous period be treated?
Anjum Maqsood - ACA Page 1

S-501 AFACR
4. IAS 19 Employee benefits December 2011 Q-4b (Marks 11)
Following information is relevant to a defined benefit pension plan of Alfalah Company for
the year 2010:
Plan Assets: Rs. (Million)

Balance at January 01, 2010 600
Expected return on plan assets 61
Contribution received 49
Benefits paid (40)
Actuarial gain (balancing figure) 15
685
Plan Liabilities:
Balance at January 01, 2010 640
Interest cost 52
Current service cost 21
Benefits paid (40)
Actuarial loss (balancing figure) 42
715
Additional Information:
 Unrecognized actuarial gains at January 01, 2010 : Rs.80 million

 Average remaining service lives of employees : 8 years
Required:
Calculate:
(i) Pension expense to be recognised in profit or loss for the year ended December 31,2010.
(ii) Net liabilities to be shown in the Statement of Financial Position as at December
31,2010.
5 IAS 19 Employee benefits February 2014 Q-3a (Marks 12)
Silver Star Ltd., is operating a defined benefit plan for its employees. The related transactions that occurred
at the reporting dates are as detailed below:
On July 1, 2011, the present value of the obligation was Rs.250 million and the fair value of the plan assets
amounted to Rs.125 million.
June 30, 2012 June 30, 2013

Discount rate 6% 5%
Rs. .in million.

Service cost 35 38
Benefits paid 25 27
Contributions paid 35 40
PV of obligations (ending balance) 310 340
FV of plan assets (ending balance) 145 165
Required:
(i) Determine the amounts of the re-measurement components arising from annual valuations of the plan
assets and obligation for the period. (Marks 06)
(ii) Prepare extracts of Statements of Profit or Loss and Other Comprehensive Income and Statements of
Financial Position for the year to June 30, 2012 and 2013. (Marks 06)

S-501 AFACR
6 IAS 19 Employee benefits August 2014 Question 4a (Marks 8)
Infinity Ltd., has introduced a post employment defined benefit compensation scheme for its
employees on July 1, 2008. Following information is related to the scheme for the year ended
June 30, 2013:
Rs. “000”
Opening Balance Closing Balance
Present value of plan liabilities 1,900 2,060

Fair value of plan assets 1,722 1,970
Activities during the year:

Current service cost 200
Benefits paid out 155
Contributions paid by the company 145
Discount rate 14%
Required:
(i) Calculate gain or loss on re-measurement of plan assets and liabilities as at June 30, 2013. 04
(ii) Prepare extracts of the Statement of Financial Position and the Statement of Profit or Loss
and Other Comprehensive Income for the year ended June 30, 2013. 04

S-501 AFACR
5. IFRS – 2 Share base payment June 2012 Q-4b (Marks 10)
Pak Electronics manufactures electronic items, which has a major domestic market share.
However, during the last few years due to entrance of two new companies manufacturing
similar items there has been a cutthroat competition. In order to maintain its market share
the directors of the company have come up with a new scheme to motivate its sales team.
According to this scheme, each member of the sales team consisting of 50 persons has
been offered 25,000shares options on January 01, 2012.In order to avail benefits of the
scheme each employee was required to meet his/her annual sales targets as well as to
remain with the company for the next three (03) years. Pak Electronics prepares its financial
statements on December 31. At the grant date the value of each share option was Rs.5.
Assume that following events relating to the scheme will take place during the next three
(03) years:
In 2012: Three (03) sales persons leave the company and another five (05) are expected to
leave during the next two (02) years.
In 2013: Three (03) sales persons leave the company and another four (04) are expected to
leave during the next one (01) year.
In 2014: Two (02) sales persons leave the company.
Required:
Show the effects of the above scheme in the Income Statement and Statement of Financial
Position of the company for the three (03) years.
The End

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S-501 AFACR

1. IAS 19 Employee benefits June 2009 Q-2c (Marks 08)

The actuarial assumptions used by the actuary are as follows:

 Discount rate 12%

2. IAS 19 Employee benefits June 2009 Q-2a (Marks 04)

Define the following terms as per IAS 19 Employee Benefits:

(i) Defined contribution plan (Marks 02)

3. IAS 19 Employee benefits June 2010 Q-4a (Marks 05)

Anjum Maqsood - ACA Page 1

4. IAS 19 Employee benefits December 2011 Q-4b (Marks 11)

Plan Assets: Rs. (Million)

 Unrecognized actuarial gains at January 01, 2010 : Rs.80 million

5 IAS 19 Employee benefits February 2014 Q-3a (Marks 12)

June 30, 2012 June 30, 2013

Rs. .in million.

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6 IAS 19 Employee benefits August 2014 Question 4a (Marks 8)

Present value of plan liabilities 1,900 2,060

Activities during the year:

Anjum Maqsood - ACA Page 3

5. IFRS – 2 Share base payment June 2012 Q-4b (Marks 10)

In 2014: Two (02) sales persons leave the company.

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