Employee benefits
IAS 19 distinguishes short-term employee benefits, post-employment benefits, other long-term benefits and termination benefits. Accounting depends on the benefit’s terms and category. For example, a defined contribution pension normally gives rise to an expense and unpaid liability for contributions, whereas a defined benefit plan requires actuarial measurement of the net obligation or asset.
Worked example
Employees earn $40,000 of salaries in December, but $8,000 remains unpaid at year end. The employer recognises salary expense for service received and an $8,000 liability, assuming no amount is included in an asset.
Common mistake
Excluding wages from employee benefits or applying the same pension calculation to every benefit category.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |