03
IAS 19 - EMPLOYEE BENEFITS
Employee benefits are all forms of consideration given by an entity in exchange for service
rendered by employees or for the termination of employment.
Employee benefits include benefits provided either to
▪ employees or
▪ their dependents or
▪ beneficiaries and may be settled by payments (or the provision of goods or services) or
to others, such as insurance companies.
Scope
▪ This Standard shall be applied by an employer in accounting for all employee benefits,
except those to which IFRS 2 Share-based Payment applies.
1-Post Employment Benefits
, 04
Accounting for Defined benefit Pension Plan
1. Contribution by Entity:
7.Remeasurment Gain or Loss
Dr Pension Asset xx
Cr Entity’s Cash xx
Dr Pension Asset/Liability xx
Cr Remeasurement gain xx (OCI)
2. Expected Return on Pension Asset:
(O/B * % on interest on high quality bond) Dr Remeasurement Loss xx (OCI)
Dr Pension Asset xx Cr Pension Asset/Liability xx
Cr Pension liability XX
✓ The actuary's calculation of the value of the plan
obligation and assets is based on assumptions,
3. Pension Benefits Paid: such as life expectancy and final salaries, and
these will have changed year-on-year.
Dr Pension Liability xx
Cr Pension Asset xx
✓ The actual return on plan assets is different from
the amount taken to profit or loss as part of the
4. Current Service Cost:
net interest component.
Present value of pension earned by employee during year
Dr Interest Expense xx (P/L)
Cr Pension Liability xx 8- Gain or Loss on Settlement
Dr Pension Liability
5. unwinding of interest: Dr P&l
Cr. Pension Asset
(O/B * % on interest on high quality bond) Cr. Cash
Dr Expense xx (P/L)
Cr Pension Liability xx
6. Past Service Cost: Past service cost is recognised as an adjustment to the
obligation and as an expense (or income) at the earlier of
Increase or decrease in present value of pension the following dates:
liability due to plan amendment or curtailment (a) When the plan amendment or curtailment
occurs; or
Increase
Dr Expense xx (P/L) (b) When the entity recognises related
Cr Pension Liability xx restructuring costs (in accordance with IAS 37)
Decrease or termination benefits
Dr Pension Liability
Cr Income xx (P/L)
IAS 19 - EMPLOYEE BENEFITS
Employee benefits are all forms of consideration given by an entity in exchange for service
rendered by employees or for the termination of employment.
Employee benefits include benefits provided either to
▪ employees or
▪ their dependents or
▪ beneficiaries and may be settled by payments (or the provision of goods or services) or
to others, such as insurance companies.
Scope
▪ This Standard shall be applied by an employer in accounting for all employee benefits,
except those to which IFRS 2 Share-based Payment applies.
1-Post Employment Benefits
, 04
Accounting for Defined benefit Pension Plan
1. Contribution by Entity:
7.Remeasurment Gain or Loss
Dr Pension Asset xx
Cr Entity’s Cash xx
Dr Pension Asset/Liability xx
Cr Remeasurement gain xx (OCI)
2. Expected Return on Pension Asset:
(O/B * % on interest on high quality bond) Dr Remeasurement Loss xx (OCI)
Dr Pension Asset xx Cr Pension Asset/Liability xx
Cr Pension liability XX
✓ The actuary's calculation of the value of the plan
obligation and assets is based on assumptions,
3. Pension Benefits Paid: such as life expectancy and final salaries, and
these will have changed year-on-year.
Dr Pension Liability xx
Cr Pension Asset xx
✓ The actual return on plan assets is different from
the amount taken to profit or loss as part of the
4. Current Service Cost:
net interest component.
Present value of pension earned by employee during year
Dr Interest Expense xx (P/L)
Cr Pension Liability xx 8- Gain or Loss on Settlement
Dr Pension Liability
5. unwinding of interest: Dr P&l
Cr. Pension Asset
(O/B * % on interest on high quality bond) Cr. Cash
Dr Expense xx (P/L)
Cr Pension Liability xx
6. Past Service Cost: Past service cost is recognised as an adjustment to the
obligation and as an expense (or income) at the earlier of
Increase or decrease in present value of pension the following dates:
liability due to plan amendment or curtailment (a) When the plan amendment or curtailment
occurs; or
Increase
Dr Expense xx (P/L) (b) When the entity recognises related
Cr Pension Liability xx restructuring costs (in accordance with IAS 37)
Decrease or termination benefits
Dr Pension Liability
Cr Income xx (P/L)
