IAS 19 Employee Benefits

IAS 19 prescribe all the type of accounting for employee benefits expect the share-based payments which are covered by IFRS 2.

The entity will provide employee benefits in exchange of services rendered by the employee or the termination of an employee.

IAS 19 requires an entity to recognize:

  • a liability when an employee has provided service in exchange for employee benefits to be paid in the future; and
  • an expense when the entity consumes the economic benefit arising from the service provided by an employee in exchange for employee benefits.

The standard sets out several employee benefit categories including:

  • short-term benefits for workers, such as sick leave
  • post-employment benefits such as pensions
  • termination benefits, and
  • other long-term employee benefits including long service leave.

The objective of IAS 19 is to specify the accounting and disclosure for employee benefits, need to understand the liability incur where an employee has provided service and expense when the entity consumes the employee services economic benefits.

 

 

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