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MFRS 119 EMPLOYEE BENEFIT - Coggle Diagram
MFRS 119
EMPLOYEE BENEFIT
OBJECTIVE
To prescribe accounting and disclosure for employee benefit
CLASSIFICATION OF EMPLOYEE BENEFIT
Short- term employee benefits
Example
Salaries, wages, social security contributions
Paid annual leave + paid sick leave
Profit sharing and bonuses
Non-monetary benefits
Definition
Employee benefits due to be settled within 12 months after the end of the period in which the employees render the related service
For current employee
Accounting treatment
Debit expenses (asset)
VS
Credit Liability (cash)
Post-employment benefits
Definition
employee benefits other than termination benefits that are payable after the completion of employment
Defined Contribution Plans
Entity's obligation: to contribute to the fund
Actuarial and investment risk: fall on employee
straight forward
risk on employee
obligated by amount contributed
undiscounted amount (no need calculate PV)
Eg: EPF
Defined Benefit Plans
Entity's obligation: to provide agreed benefits
Actuarial and investment risk: fall on entity
complex
risk on entity
obligated by employer
discounted amount (calculate PV)
Eg: pension fund for government servant
Other long-term employee benefits
Definition
All employee benefits other than short-term employee benefits, post-employment benefits and termination benefits
Example
Long-term paid absences
Jubilee or other long-service benefits
Long-term disability benefits
Profit sharing and bonuses
Deferred Remuneration
Accounting treatment
Projected Unit Credit Method
Termination benefits
Conditions WHEN to account
If enhancement to post-employment benefits
When settled within 12 months
When not wholly settled within 12 months
Example
Bonuses for accepting termination voluntarily