IAS 19 Employee Benefits - IFRS Foundation

IAS 19 prescribes the accounting for all types of employee benefits except share-based payment, to which IFRS 2 applies. Employee benefits are all forms of ... ABOUTUS AROUNDTHEWORLD ISSUEDSTANDARDS APPLYINGSTANDARDS PROJECTS NEWS&EVENTS SERVICES SUSTAINABILITY TheIFRSFoundationisanot-for-profit,publicinterestorganisationestablishedtodevelophigh-quality,understandable,enforceableandgloballyacceptedaccountingandsustainabilitydisclosurestandards. OurStandardsaredevelopedbyourtwostandard-settingboards,theInternationalAccountingStandardsBoard(IASB)andInternationalSustainabilityStandardsBoard(ISSB).  AbouttheIFRSFoundation Whoweare HowwesetIFRSStandards Consolidatedorganisations(VRF&CDSB) Workwithus Contactus Governance Ourstructure MonitoringBoard Trustees Consultativebodies IFRSAccounting InternationalAccountingStandardsBoard IFRSInterpretationsCommittee IFRSSustainability InternationalSustainabilityStandardsBoard ISSBInvestorAdvisoryGroup IntegratedReporting IntegratedReportingandConnectivityCouncil Whyhaveglobalaccountingandsustainabilitystandards? Whatbenefitsdothey bringtotheworld economy? Discovermoreabouttheadoption processforIFRSAccountingStandards,andwhich jurisdictionshave adoptedthemandrequiretheiruse. Globalaccountingstandards Whyglobalaccountingstandards? AccountingStandardsbyjurisdiction Adoptionandcopyright Globalsustainabilitystandards Whydoweneedaglobalbaselineforcapitalmarkets? AccessourStandards,Interpretationsandrelatedmaterialshere. Ifyouregisterwithusforafreeacccount,youcanaccessPDFfilesofthisyear'sconsolidatedIFRSAccountingStandards,IFRICInterpretations,the ConceptualFrameworkforFinancialReportingand IFRSPracticeStatements, aswellasavailabletranslationsofStandards. IFRSAccountingStandards IFRSAccountingStandardsNavigator IFRSforSMEsAccountingStandard Translations IFRSAccountingTaxonomy Editorialcorrections IFRSSustainabilityDisclosureStandards(inprogress) GeneralSustainability-relatedDisclosures Climate-relatedDisclosures ExistingStandards SASBStandards IntegratedReporting IntegratedReportingFramework IntegratedThinkingPrinciples Whatdowedooncewe’veissuedaStandard?WeundertakevariousactivitiestosupporttheconsistentapplicationofIFRSStandards,whichincludesimplementationsupportforrecentlyissuedStandards.WedothisbecausethequalityofimplementationandapplicationoftheStandardsaffectsthebenefitsthatinvestorsreceivefromhavingasinglesetofglobalstandards. Supportingapplication SupportingmaterialsforIFRSAccountingStandards SupportingmaterialsforIFRSSustainabilityDisclosureStandards SupportingconsistentapplicationofIFRSAccountingStandards SupportingmaterialsforIFRSforSMEsAccountingStandard TheworkplanincludesallprojectsundertakenbytheIFRSFoundationTrustees,theInternationalAccountingStandardsBoard(IASB),theInternationalSustainabilityStandardsBoard(ISSB)andtheIFRSInterpretationsCommittee.Publicconsultationsareakeypartofallourprojectsandareindicatedontheworkplan. Projects Workplan Openforcomment Completedprojects IASBpipelineprojects SASBStandardsprojects Reviews IASBPost-implementationReviews Readourlatestnews,featuresandpressreleasesandseeourcalendarofevents,meetings,conferences,webinarsandworkshops. Newsandpodcasts Latestnews Monthlynewssummaries IASBpodcasts ISSBpodcasts InterpretationsCommitteepodcasts Speeches Updates IASBUpdates ISSBUpdates InterpretationsCommitteeUpdates IFRSforSMEsAccountingStandardUpdate InvestorUpdates Meetingsandevents Calendar Mediaresources Mediaenquiries Pressreleases Otherresources Weofferabroadrangeofproductsandpremiumservices,including print anddigitaleditionsoftheIFRSFoundation'smajorworks,andsubscriptionoptionsforallIFRSAccountingStandardsandrelateddocuments. EverypurchasecontributestotheindependenceandfundingoftheIFRSFoundationandtoitsmission.  IFRSAccounting Productsandservices IFRSshop Speakerrequests Licensing IFRSSustainability Productsandservices Register RegisterforIFRS.org On3November2021,atCOP26,theIFRSFoundationTrusteesannouncedthecreationoftheInternationalSustainabilityStandardsBoard(ISSB). TheISSBwilldeliveraglobalbaselineofsustainabilitydisclosurestomeetcapitalmarketneeds. Standard-setting InternationalSustainabilityStandardsBoard Consolidatedorganisations Consolidatedorganisations(CDSB&VRF) Projects Climate-relatedDisclosures GeneralSustainability-relatedDisclosures News Latestnews ABOUTUS AbouttheIFRSFoundation Whoweare HowwesetIFRSStandards Consolidatedorganisations(VRF&CDSB) Workwithus Contactus Governance Ourstructure MonitoringBoard Trustees Consultativebodies IFRSAccounting InternationalAccountingStandardsBoard IFRSInterpretationsCommittee IFRSSustainability InternationalSustainabilityStandardsBoard ISSBInvestorAdvisoryGroup IntegratedReporting IntegratedReportingandConnectivityCouncil AROUNDTHEWORLD Globalaccountingstandards Whyglobalaccountingstandards? AccountingStandardsbyjurisdiction Adoptionandcopyright Globalsustainabilitystandards Whydoweneedaglobalbaselineforcapitalmarkets? ISSUEDSTANDARDS IFRSAccountingStandards IFRSAccountingStandardsNavigator IFRSforSMEsAccountingStandard Translations IFRSAccountingTaxonomy Editorialcorrections IFRSSustainabilityDisclosureStandards(inprogress) GeneralSustainability-relatedDisclosures Climate-relatedDisclosures ExistingStandards SASBStandards IntegratedReporting IntegratedReportingFramework IntegratedThinkingPrinciples APPLYINGSTANDARDS Supportingapplication SupportingmaterialsforIFRSAccountingStandards SupportingmaterialsforIFRSSustainabilityDisclosureStandards SupportingconsistentapplicationofIFRSAccountingStandards SupportingmaterialsforIFRSforSMEsAccountingStandard PROJECTS Projects Workplan Openforcomment Completedprojects IASBpipelineprojects SASBStandardsprojects Reviews IASBPost-implementationReviews NEWS&EVENTS Newsandpodcasts Latestnews Monthlynewssummaries IASBpodcasts ISSBpodcasts InterpretationsCommitteepodcasts Speeches Updates IASBUpdates ISSBUpdates InterpretationsCommitteeUpdates IFRSforSMEsAccountingStandardUpdate InvestorUpdates Meetingsandevents Calendar Mediaresources Mediaenquiries Pressreleases Otherresources SERVICES IFRSAccounting Productsandservices IFRSshop Speakerrequests Licensing IFRSSustainability Productsandservices Register RegisterforIFRS.org SUSTAINABILITY Standard-setting InternationalSustainabilityStandardsBoard Consolidatedorganisations Consolidatedorganisations(CDSB&VRF) Projects Climate-relatedDisclosures GeneralSustainability-relatedDisclosures News Latestnews Follow-IAS19EmployeeBenefits× YouneedtoSignintousethisfeature Close ShowSections About Standard News About IAS19prescribestheaccountingforalltypesofemployeebenefitsexceptshare-basedpayment,towhichIFRS2applies.Employeebenefitsareallformsofconsiderationgivenbyanentityinexchangeforservicerenderedbyemployeesorfortheterminationofemployment.IAS19requiresanentitytorecognise: aliabilitywhenanemployeehasprovidedserviceinexchangeforemployeebenefitstobepaidinthefuture;and anexpensewhentheentityconsumestheeconomicbenefitarisingfromtheserviceprovidedbyanemployeeinexchangeforemployeebenefits. Short-termemployeebenefits(tobesettledwithin12months,otherthanterminationbenefits) Thesearerecognisedwhentheemployeehasrenderedtheserviceandaremeasuredattheundiscountedamountofbenefitsexpectedtobepaidinexchangeforthatservice. Post-employmentbenefits(otherthanterminationbenefitsandshort-termemployeebenefits)thatarepayableafterthecompletionofemployment Plansprovidingthesebenefitsareclassifiedaseitherdefinedcontributionplansordefinedbenefitplans,dependingontheeconomicsubstanceoftheplanasderivedfromitsprincipaltermsandconditions: Adefinedcontributionplanisapost-employmentbenefitplanunderwhichanentitypaysfixedcontributionsintoaseparateentity(afund)andwillhavenolegalorconstructiveobligationtopayfurthercontributionsifthefunddoesnotholdsufficientassetstopayallemployeebenefitsrelatingtoemployeeserviceinthecurrentandpriorperiods. UnderIAS19,whenanemployeehasrenderedservicetoanentityduringaperiod,theentityrecognisesthecontributionpayabletoadefinedcontributionplaninexchangeforthatserviceasaliability(accruedexpense)andasanexpense,unlessanotherStandardrequiresorpermitstheinclusionofthecontributioninthecostofanasset. Adefinedbenefitplanisanypost-employmentbenefitplanotherthanadefinedcontributionplan. UnderIAS19,anentityusesanactuarialtechnique(theprojectedunitcreditmethod)toestimatetheultimatecosttotheentityofthebenefitsthatemployeeshaveearnedinreturnfortheirserviceinthecurrentandpriorperiods;discountsthatbenefitinordertodeterminethepresentvalueofthedefinedbenefitobligationandthecurrentservicecost;deductsthefairvalueofanyplanassetsfromthepresentvalueofthedefinedbenefitobligation;determinestheamountofthedeficitorsurplus;anddeterminestheamounttoberecognisedinprofitandlossandothercomprehensiveincomeinthecurrentperiod.Thosemeasurementsareupdatedeachperiod. Otherlong-termbenefits Theseareallemployeebenefitsotherthanshort-termemployeebenefits,post-employmentbenefitsandterminationbenefits.Measurementissimilartodefinedbenefitplans. Terminationbenefits Terminationbenefitsareemployeebenefitsprovidedinexchangefortheterminationofanemployee’semployment.Anentityrecognisesaliabilityandexpenseforterminationbenefitsattheearlierofthefollowingdates: whentheentitycannolongerwithdrawtheofferofthosebenefits;and whentheentityrecognisescostsforarestructuringthatiswithinthescopeofIAS37andinvolvesthepaymentofterminationbenefits. Standardhistory InApril2001theInternationalAccountingStandardsBoard(Board)adoptedIAS 19EmployeeBenefits,whichhadoriginallybeenissuedbytheInternationalAccountingStandardsCommitteeinFebruary1998.IAS 19EmployeeBenefitsreplacedIAS 19AccountingforRetirementBenefitsintheFinancialStatementsofEmployers(issuedinJanuary1983).IAS 19wasfurtheramendedin1993andrenamedasIAS 19RetirementBenefitCosts. TheBoardamendedtheaccountingformulti‑employerplansandgroupplansinDecember2004.InJune2011theBoardrevisedIAS 19;thisincludedeliminatinganoptionthatallowedanentitytodefertherecognitionofchangesinnetdefinedbenefitliabilityandamendingsomeofthedisclosurerequirementsfordefinedbenefitplansandmulti‑employerplans. InNovember2013IAS 19wasamendedbyDefinedBenefitPlans:EmployeeContributions(AmendmentstoIAS 19).Theamendmentssimplifiedtherequirementsforcontributionsfromemployeesorthirdpartiestoadefinedbenefitplan,whenthosecontributionsareappliedtoasimplecontributoryplanthatislinkedtoservice. OtherStandardshavemademinorconsequentialamendmentstoIAS 19,includingAnnualImprovementstoIFRSs2012–2014Cycle(issuedSeptember2014),AnnualImprovementstoIFRSStandards2014–2016Cycle(issuedDecember2016),IFRS 17InsuranceContracts(issuedMay 2017),PlanAmendment,CurtailmentorSettlement(AmendmentstoIAS 19)(issuedFebruary2018)andAmendmentstoReferencestotheConceptualFrameworkinIFRSStandards(issuedMarch2018). Relatedactiveprojects DisclosureInitiative—TargetedStandards-levelReviewofDisclosures Relatedcompletedprojects AttributingBenefittoPeriodsofService(IAS19) AvailabilityofaRefund(AmendmentstoIFRIC14) DefinedBenefitPlans:EmployeeContributions(AmendmentstoIAS19) DiscountRateforEmployeeBenefits(AmendmentstoIAS19) DiscountRateinaCountrythathasAdoptedAnotherCountry’sCurrency(IAS19) DiscountRate:RegionalMarketIssue(AmendmentstoIAS19) DiscountRates EffectofaPotentialDiscountonPlanClassification(IAS19) EmployeeBenefits(2011revisionofIAS19) IFRSTaxonomyUpdate—CommonPractice(IAS19EmployeeBenefits) PensionBenefitsthatDependonAssetReturns PlanAmendment,CurtailmentorSettlement(AmendmenttoIAS19) Post-employmentBenefits PrepaymentsofaMinimumFundingRequirement(AmendmentstoIFRIC14) TerminationBenefits(AmendmentstoIAS19) RelatedIFRSStandards IAS19EmployeeBenefits RelatedIFRICInterpretations IFRIC14IAS19—TheLimitonaDefinedBenefitAsset,MinimumFundingRequirementsandtheirInteraction Unconsolidatedamendments Implementationsupport IAS19EmployeeBenefits Yourprivacy IFRSFoundationcookies Weusecookiesonifrs.orgtoensurethebestuserexperiencepossible.Forexample,cookiesallowustomanageregistrations,meaningyoucanwatchmeetingsandsubmitcommentletters.Cookiesthattellushowoftencertaincontentisaccessedhelpuscreatebetter,moreinformativecontentforusers. 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