Employee benefits Flashcards

1
Q

employee benefits

A

all forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment

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2
Q

categories employee benefits

A
  • short-term employee benefits (payable within 12 months)
  • post-employment benefits (payable after completion of employment)
  • other long-term employee benefits (not payable within 12 months after rendering services)
  • termination benefits
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3
Q

post-employment benefits

A

formal or informal arrangements under which an entity provides post-employment benefits for one or more employees (retirement benefits, life insurance etc.)

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4
Q

Defined contribution plans

A

entity pays a fixed contribution into a separate entity => risk falls upon the employee

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5
Q

Defined benefit plans

A

employer obliged to provide agreed level of post-employment benefits
=> risk falls upon the employer

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6
Q

actuarial risk

A

risk of cost of providing benefits (assurance)

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7
Q

investment risk

A

risk that assets will be insufficient to pay required benefits

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8
Q

accounting for defined contribution post-employment plans

A
  • if payment > expense then asset
  • if payment < expense then liability
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9
Q

amounts to be recognized in profit/loss

A
  • current service cost
  • past service cost
  • net interest
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10
Q

amounts to be recognized in other comprehensive income

A
  • actuarial gains and losses
  • excess return on plan assets
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11
Q

how should we account for short-term employee benefits

A

should be expensed when incurred. Liability may arise when benefits are accumulating across account periods

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12
Q

accumulating and vesting

A

liability recorded at each reporting date

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13
Q

accumulating but non-vesting

A

liability only recognized for the portion that is expected to result in additional payment to employees

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