5 - Employee Benefits Pt. 1

Question 1

PAS for employee benefits

Answer 1

PAS 19

Question 2

PAS for Accounting & Reporting by Retirement Benefit Plans

Answer 2

PAS 26

Question 3

All forms of consideration given by entity in exchange for service rendered by employees or for termination of employment

Answer 3

Employee benefits

Question 4

Include regular, part-time or casual, etc.

Answer 4

Employees

Question 5

Employee benefits are recognized as ___ when employees have rendered service except if employee benefits form part of the cost of another asset.

Answer 5

expense

Question 6

Employee benefits already earned but not yet paid are recognized as ___

Answer 6

liabilities

Question 7

Employee benefits may arise from: (3)

Answer 7

1. Contractual agreements
2. Legislation
3. Informal practices that create constructive obligations

Question 8

4 Categories of Employee Benefits under PAS 19

Answer 8

a. Short-term
b. Post-employment
c. Other long-term
d. Termination

Question 9

Due to be settled within 12 months after end of the period where employees have rendered the related services.

Answer 9

Short-term employee benefits

Question 10

Fixed amount

Answer 10

Salaries

Question 11

Per hour; not fixed

Answer 11

Wages

Question 12

If there is excess payment in the benefits, it is recognized as ___

Answer 12

Prepaid asset

Question 13

Short-term employee benefits are recognized ___

Answer 13

periodically

Question 14

Include vacation, holiday, maternity, paternity, and sick leaves.

Answer 14

Short-term absences

Question 15

Entitlement to paid absences may be either:

Answer 15

a. Accumulating
1. Vesting
2. Non-vesting
b. Non-accumulating

Question 16

Can be carried forward and used in future periods if not used in current period.

Answer 16

Accumulating

Question 17

Unused entitlement paid in cash when employee leaves the entity (monetized)

Answer 17

Vesting

Question 18

Unused entitlement are not monetized

Answer 18

Non-vesting

Question 19

Expire if not used in current period and are not paid in cash when employee leaves the entity

Answer 19

Non-accumulating

Question 20

All unused entitlements are accrued & measured @ their expected settlement amount

Answer 20

Accumulating & vesting

Question 21

Unused entitlements are accrued but taking into account the possibility that employees may leave before they use those entitlements.

Answer 21

Accumulating & non-vesting

Question 22

Unused entitlements are not accrued but recognized only

Answer 22

Non-accumulating

Question 23

Additional incentives given to employees - to motivate the employees to be more productive

Answer 23

Profit-sharing and bonus plans

Question 24

Profit sharing and bonuses are recognized when: (2)

Answer 24

1. Entity has a present obligation to pay for them
2. Cost can be measured reliably

Question 25

Examples of bonus schemes:

Answer 25

1. Before before 2. After before 3. Before after 4. After after

Question 26

Employee benefits that are payable after the completion of employment (except termination & short-term employee benefits)

Answer 26

Post-employment benefits

Question 27

Can be formal or informal

Answer 27

Post-employment benefit plan

Question 28

Post-employment benefit plan can be:

Answer 28

a. Contributory or Non-contributory b. Funded or Unfunded

Question 29

Post-employment benefits plan is formal if

Answer 29

explicitly stated in employment contract

Question 30

Post-employment benefits plan is informal if

Answer 30

not documented but implied

Question 31

Both employer & employee contribute to the retirement fund of employee

Answer 31

Contributory

Question 32

Only the employer contributes to the retirement fund of employee

Answer 32

Non-contributory

Question 33

Retirement fund is isolated from employer's control and is transferred to a trustee to manage fund and pay directly the retiring employees

Answer 33

Funded

Question 34

Employer manages any established fund and pays directly the retiring employees

Answer 34

Unfunded

Question 35

Employer commits to make fixed contributions that will be used to pay for the retirement benefits of the employees; risk rests with employee

Answer 35

Defined contribution plans

Question 36

Employer commits to pay a definite amount of retirement benefits; risk rests with employer

Answer 36

Defined benefit plans

Question 37

Retirement benefits plans that have characteristics of both defined contribution plan and defined benefit plan; considered defined benefit plans

Answer 37

Hybrid plans

Question 38

Various unrelated employers contribute to a common fund manage by a trustee to provide post-employment benefits to employees of participating employers; classified as either defined contribution plans or defined benefit plans

Answer 38

Multi-employer plans

Question 39

Established by law and operated by the government. It is mandatory for all entities not subject to control/influence by entity; classified as either defined contribution plans or defined benefit plans

Answer 39

State plansa

Question 40

Covers government employees

Answer 40

Government Service Insurance System (GSIS)

Question 41

Covers private sector

Answer 41

Social Security System (SSS)

Question 42

Types of Retirement Benefits:

Answer 42

1. Lifetime monthly pension 2. Lump sum account

Question 43

Retiree who has paid at least 120 monthly contributions prior to retirement

Answer 43

Lifetime monthly pension

Question 44

Retiree who has not paid the required 120 monthly contributions

Answer 44

Lump sum amount

Question 45

A retiree has the option to receive in advance the first ___ monthly pension in lump sum.

Answer 45

18

Question 46

Based on the contributions paid, credited years of service and number of dependent minor children not to exceed five.

Answer 46

Monthly pension

Question 47

Equal to the total contributions paid by the member and by the employer including interest

Answer 47

Lump sum

Question 48

Upon death of retiree, primary beneficiaries are entitled to ___ of the monthly pension & dependents to the 'dependents' pension.

Answer 48

100%

Question 49

Compulsory retirement age

Answer 49

60-65 years

Question 50

Retirement Pay Law

Answer 50

R.A. 7641

Question 51

R.A. 7641

Answer 51

Retirement Pay Law

Question 52

Employer may pay insurance premiums to fund a post-employment benefit plan; either defined contribution plan or defined benefit plan.

Answer 52

Insured Benefits

Question 53

Accounting for defined contribution plan recognizes contribution as ___ and ___ when employees have rendered service.

Answer 53

expense; liability

Question 54

If defined contribution plan is due within 12 months, it is measured ___

Answer 54

@ an undiscounted amount

Question 55

If defined contribution plan is due beyond 12 months it is

Answer 55

discounted

Question 56

Assumes obligation of paying the retiring employee

Answer 56

Trustee

Question 57

According to PAS 19, in the absence of a retirement plan, entities are subject to the ___

Answer 57

minimum requirement of the law