Wiley International Trends in Financial Reporting under IFRS: Including Comparisons with US GAAP, Chinese GAAP, and Indian GAAP

CHAPTER 25

EMPLOYEE BENEFITS (IAS 19)

1. OBJECTIVE

1.1 This Standard prescribes the accounting treatment and disclosure by employers for employee benefits. This Standard shall be applied by an employer in accounting for all employee benefits except those that are considered under other Standards: International Financial Reporting Standards (IFRS) 2, Share-Based Payment, and International Accounting Standard (IAS) 26, Accounting and Reporting by Retirement Benefit Plans.

2. SYNOPSIS OF THE STANDARD

The requirements of this Standard that should be applied by an employer for all employee benefits are summarized next.

2.1 This Standard provides that an employer should recognize a liability when service has been provided by an employee in exchange for the benefits to be paid in the future. Similarly, an employer should recognize an expense when the economic benefits are received by the employer from the services provided by the employee.

2.2 The employee benefits that are provided may be due to formal plans or agreements between the employer and employees, due to legislative or industry practices, or due to informal practices that give rise to a constructive obligation to grant such benefits.

2.3 This Standard covers all benefits paid to employees, whether the employees are full-time, part-time, permanent, casual, or temporary employees, and to directors and other managerial personnel of the entity.

2.4 Employee benefits can be categorized as

• Postemployment benefits (examples are pension ...