Employee Benefits

Question 1

When should employee benefits be recognised?

Answer 1

When they are earned or an obligation is created (profit share)

Question 2

What is a defined contribution and defined benefit plan?

Answer 2

Contribution: Defined amount, obligation ends at the payment. Benefit: More onerous, based on final salary say where assets generally held to balance the liability

Question 3

What are the elements to a defined benefit plan?

Answer 3

Service Cost 
Pension Contributions
Expected Return on Assets
Interest Cost
Benefits Paid Out
Actuarial Variance

SRICBA

Question 4

What is an Asset Ceiling

Answer 4

Any asset on balance sheet in respect of pension liability is lower of:

Any surplus in the fund
PV of economic benefits available