IFRS Essentials

IAS 19 EMPLOYEE BENEFITS AND IAS 26 ACCOUNTING AND REPORTING BY RETIREMENT BENEFIT PLANS

1 INTRODUCTION

IAS 19 prescribes the accounting treatment of employee benefits. In June 2011, the IASB amended IAS 19. The new version of the Standard has to be applied in the financial statements as at Dec 31, 2013 (if the entity's reporting periods are identical with the calendar years). Earlier application is permitted (IAS 19.172). In the European Union, new IFRSs have to be endorsed by the European Union before they can be applied. The new version of IAS 19 has already been endorsed by the EU. The amended standard has to be applied retrospectively with two exceptions (IAS 19.173).

This chapter of the book is structured as follows:

• Section 2 discusses the rules applicable if the entity decides not to apply the new version of IAS 19 early.
• Section 3 discusses the main differences between the “old” and the “new” version of IAS 19.

2 FINANCIAL REPORTING WITHOUT EARLY APPLICATION OF THE AMENDMENTS TO IAS 19 ISSUED IN JUNE 2011

2.1 Introduction and Scope

IAS 19 prescribes the accounting treatment of employee benefits. Employee benefits comprise all forms of consideration given by an entity in exchange for service rendered by employees (IAS 19.7). Employees include directors and other management personnel (IAS 19.6). IAS 19 is applied to all employee benefits except those to which IFRS 2 (share-based payment) applies (IAS 19.1). In IAS 19 and in the remainder of this chapter of the book, employee ...