EMPLOYEES BENEFITS

• are all forms of consideration

  given by an entity in exchange for service

  rendered by employees.

  Employee benefits
• Short-term employee benefits are employee benefits

  (other than termination benefits) that are due to be

  settled within 12 months after the end of the period in

  which the employees render the related service.
• Accumulating compensated absences are those that are carried forward and can be used in future periods if the current period’s entitlement is not used in full.
• wherein employees are entitled to a cash payment for

  unused entitlement on leaving the entity

  vesting
• employees are not entitled to a cash

  payment for unused entitlement on leaving the entity

  non-vesting
• Non-accumulating compensated absences are those that are not carried forward. No liability or expense is recognized until the absences occur, because employee service does not increase the amount of the

  benefit.
• Formula for Bonus before bonus and before tax

  B+P X Br
• Post-employment benefits are employee benefits (other

  than termination benefits) which are payable after the

  completion of employment. Post-employment benefit

  plans are include:

  Retirement benefits, such as pensions & lump-sum

  payments on retirement

  Postemployment life insurance

  Postemployment medical care
• Defined contribution plans

  1. Entity pays fixed contributions into a separate entity

  known as the fund.

  b. The entity 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. c. The contribution is definite but the benefit is indefinite
• 2. Defined benefit plan

  1. Postemployment plan other than a defined contribution plan

  b. An entity’s obligation is to provide the agreed

  benefits to the employees.

  c. The benefit is definite but the contribution is

  indefinite
• If the FVPA is more than the PBO, the plan is OVERFUNDED

  and therefore there is a PREPAID BENEFIT COST – Non Current

  Asset
• If the FVPA is less than the PBO, the plan is UNDERFUNDED, and

  therefore, there is an ACCRUED BENEFIT COST, - Non Current

  Liability
• Hybrid plans are retirement benefits plans that have

  characteristics of both a defined contribution plan and a

  defined benefit plan. For accounting purposes, hybrid

  plans are considered as defined benefit plans.
• Multi-employer plans are pool of assets contributed by various

  employers to a trustee which uses those assets to provide benefits

  to employees of the various contributing employers.
• State plans are established by legislation to cover all entities and are

  operated the government which is not subject to control or influence

  by the reporting entity.
• The asset ceiling is the present value of any economic benefits

  available in the form of refunds from the plan or reductions in future

  contributions to the plan.
• Current service cost - is the increase in the present value of

  a defined benefit obligation resulting from employee service in

  the current period.
• Past service cost - is the change in the present value of the

  defined benefit obligation resulting from a plan amendment or

  curtailment.
• Gain or loss on settlement – the difference between the

  present value of the defined benefit obligation and the

  settlement price.
• Interest cost on the defined benefit obligation – is the

  increase during a period in the present value of a defined benefit

  obligation which arises because the benefits are one period closer

  to settlement.
• Actuarial gains and losses – are changes in the present

  value of the defined benefit obligation resulting from

  experience adjustments and the effects of changes in

  actuarial assumptions.
• The rate used to discount post-employment benefit obligations shall

  be determined by reference to market yields at the end of the

  reporting period on high quality corporate bonds.