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Employee Benefits - Coggle Diagram
Employee Benefits
Short term benefits
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Recognize expected cost only when:
- Obligation (legal and constructive) and
- Reliable estimate of obligation
- A present obligation only exists when the entity has no realistic alternative but to make the payments
- If not paid within 12 moths after the end of period in which employees rendered the related service (LT employee benefits)
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Accumulating (short term paid absences) (holiday leave) (can be carried over to the next year)
- Recognize when the employees render service that increases their entitlement to future compensated absences
- Measure the additional amount that the entity expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period
- Vesting entitled to a cash payment for unused entitlement on leaving the entity
- Non vesting: not entitled.....
Employee benefits that are expected to be settled wholly before 12 months after the end of the period in which the employees render the related service
Non-accumulating (sick leave)
- Recognize when the absences occur
Leave provision
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[# unused days x probability} x R/day 9next year, thus + increase)]
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Termination benefits
Recognition:
Expenses and liability - earliest of:
- Can no longer withdraw offer
- Recognize cost for restructuring it to IAS 37 (provisions) that involves payment of termination benefits
Measurement:
- Settled before 12 months - apply rules of ST (undiscounted amount) benefits
- Settled after 12 months - apply rules of other LT benefits
Employee benefits payable as a result of either:
- An entity's decision to terminated an employee's employment before the normal retirement date; or
- An employee's decision to accept voluntary redundancy in exchange for those benefits
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Employee benefits
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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Constructive obligation
Employer created an expectation by for example paying bonuses for the past 5 years, even if it is not in the contract, therefore the employee can expect a bonus from the employer's previous acts
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Other LT benefits
Employee benefits other than ST, post-employment benefits and termination benefits that are not due to be settled within 12 months after the end of the period in which the employees render the related service
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