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    Pas 19

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    Princess Jullyn Claudio
    This document outlines the accounting and disclosure requirements for employee benefits as prescribed in PAS 19. It discusses the four categories of employee benefits - short-term, post-employment, other long-term, and termination benefits. For post-employment benefits, it distinguishes between defined contribution plans and defined benefit plans, and describes the complex accounting treatment required for defined benefit plans.

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    Pas 19

    Uploaded by

    Princess Jullyn Claudio
    282 views20 pages
    This document outlines the accounting and disclosure requirements for employee benefits as prescribed in PAS 19. It discusses the four categories of employee benefits - short-term, post-employment, other long-term, and termination benefits. For post-employment benefits, it distinguishes between defined contribution plans and defined benefit plans, and describes the complex accounting treatment required for defined benefit plans.

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    PAS-19

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    This document outlines the accounting and disclosure requirements for employee benefits as prescribed in PAS 19. It discusses the four categories of employee benefits - short-term, post-employment, other long-term, and termination benefits. For post-employment benefits, it distinguishes between defined contribution plans and defined benefit plans, and describes the complex accounting treatment required for defined benefit plans.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    282 views20 pages

    Pas 19

    Uploaded by

    Princess Jullyn Claudio
    This document outlines the accounting and disclosure requirements for employee benefits as prescribed in PAS 19. It discusses the four categories of employee benefits - short-term, post-employment, other long-term, and termination benefits. For post-employment benefits, it distinguishes between defined contribution plans and defined benefit plans, and describes the complex accounting treatment required for defined benefit plans.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 20

    PAS 19

    EMPLOYEE
    BENEFITS
    OBJECTIVES AND
    SCOPE

    Accounting and disclosure for


    employee benefits
    Costs of providing employee
    benefits should be recognised in
    the period in which the benefit is
    earned by employees
    INTRODUCTION

    PAS 19 prescribes the


    accounting for employee benefits
    by employers.
    Employee benefits are all forms
    of consideration given by an entity
    in exchange for services rendered
    by employees or for the
    termination of employment.
    4 CATEGORIES OF
    EMPLOYEE BENEFITS

    Short-term employee benefits


    Post-employment benefits
    Other long-term employee benefits

    Termination benefits
    SHORT-TERM EMPLOYEE
    BENEFITS
    These are benefits that are due
    to be settled within 12 months
    after the end of the period in
    which the employees rendered
    the service.
    Not discounted
    Recognized periodically
    SHORT-TERM PAID
    ABSENCES
    The right to paid absences may be either:
    Accumulating – those that can be carried
    forward and used in the future periods if not
    used. May be either:
    Vesting – unused rights paid in cash
    Non-vesting – unused rights not
    monetized
    Non-accumulating – those that expire when
    not used in the current period
    POST-
    EMPLOYMENT
    BENEFITS
    Formal or informal arrangements
    that provide benefits after
    employment, such as pension and
    retirement benefits.
    Can be Contributory or Non-
    contributory and Funded or
    Unfunded
    POST-
    EMPLOYMENT
    BENEFITS
    Contributory – employee also
    contributes a portion to the fund
    Non-Contributory – employer pays
    the entire retirement benefits
    Funded – fund is transferred to a
    trustee
    Unfunded – employer solely
    establishes and manages the fund
    TYPES OF POST-
    EMPLOYMENT BENEFIT
    PLANS
    Defined Contribution Plans
    (DCP) – both the employer and
    employee commits to make fixed
    contributions to a fund.

    Defined Benefit Plans (DBP) –


    the employer commits to pay a
    definite amount of retirement
    WHO ASSUMES THE
    RISK?
    Write here a list of features

    Here you can write more

    More about your project.

    Content itself is what the end-user derives value from also


    can refer.
    ACCOUNTING FOR DCP
    Straight-forward
    Liability is recognized only for
    contributions unpaid at the end of the
    period
    Expense recognized in same period
    as services are rendered
    If due within 12 months, it is
    undiscounted but if due beyond 12
    months, it is discounted.
    ACCOUNTING FOR DBP
    Complex
    Requires actuarial valuations using
    the projected unit credit method
    Projected unit credit method –
    sees each period of service as giving
    rise to an additional unit of benefit
    entitlement and measures each unit
    separately to build up the final
    obligation.
    ACCOUNTING FOR DBP
    STEP 1 : Determine the deficit or
    surplus
    = Present value of the defined
    benefit obligation (PV of DBO) – Fair
    value of plan assets (FPVA)

    FPVA > PV of DBO = deficit


    FPVA < PV of DBO = surplus
    ACCOUNTING FOR DBP
    STEP 2 : Determine the Net defined
    liability or asset

    Net defined liability = deficit


    Net defined asset = lower of surplus
    and asset ceiling
    ACCOUNTING FOR DBP

    STEP 3 : Determine the


    components of the defined cost to
    be recognized in the Profit/Loss and
    Other Comprehensive Income.
    MULTIPLE EMPLOYER
    PLANS VS. MULTI-
    EMPLOYER PLANS
    Multiple Employer Plans – two or
    more unrelated employers

    Multi-Employer Plans – more than


    one employer, typically within the
    same or related industries
    STATE PLANS
    Established by the law and operated
    by the government.
    Mandatory for all entities within its
    scope
    Examples are: Government Service
    Insurance System (GSIS), which
    covers government employees; and
    Social Security System (SSS), which
    covers those in the private sector.
    R.A. 7641 RETIREMENT PAY
    LAW
    Covers qualified private sector
    employees
    Age is between 60-65 years old
    Minimum service years of 5 years
    Not a state plan

    INSURED BENEFITS
    The employer may pay insurance
    premiums to fund a post-
    OTHER LONG-TERM
    EMPLOYEE BENEFITS
    Benefits other than post-
    employment and termination
    Due to be settled beyond 12
    months after the period end
    Accounted for similar to DBP,
    except that all the component of the
    defined benefit cost are recognized
    in the profit or loss.
    TERMINATION BENEFITS
    Result of either:
    The entity terminates employment before the
    normal retirement date
    The employee voluntarily accepts entity’s offer
    of benefits in exchange for termination

    Recognized when:
    Employee accepts the offer so entity can no
    longer withdraw it
    When entity recognizes restructuring costs (
    PAS 37)

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