Accounting for Employee Benefits under IAS 19
employee benefits on a chalk board

Accounting for Employee Benefits under IAS 19

Employers are on the hot seat when it comes to benefits they offer their employees. We are seeing employers get creative and try to offer the best perks in order to attract and hire top talent (P.S. we are hiring!). Do you expect your employer to give you Fridays off in the summer (Okay!)? Do you want unlimited sick days (Sure!)? Do you want pet sitting paid for during work hours (I don’t have a dog so I can’t answer that)? Think about all the different benefits that are being offered to employees; but have you ever thought about how these benefits are accounted for?

Lucky for you, GAAP Dynamics has thought about the accounting, and as part of our IFRS eLearning library we’ve put together a course collection (eligible for 2.0 hours of CPE) on IAS 19, Employee Benefits! If you’re looking for U.S. GAAP rules, we also have an eLearning course on Pensions and Postretirement Benefits (worth 1.5 CPE credits). However, this blog post summarizes our course collection on IAS 19.

Employee Benefits: Scope and Defined Contribution Plans under IAS 19

IAS 19 sets forth the accounting and disclosure for employee benefits and requires the recognition of:

  • A liability when an employee has provided service and earned benefits, but the benefits will be paid in the future; and
  • An expense as the entity consumes the economic benefit provided by the employee through their service in exchange for employee benefits

Note that IAS 19 does not define the term “employee”; therefore, when we refer to “employee”, this includes an employee that provides services on a full‑time, part‑time, permanent, casual, or temporary basis. Additionally, employees can also include directors and other management personnel.

In this CPE-eligible eLearning course (1.0 CPE), you’ll learn what’s in scope of IAS 19, and the various accounting requirements for certain types of employee benefits, including short-term, termination, and defined contribution plans. By the end of this course, you should be able to:

  • Recall the scope of IAS 19
  • Recognize the accounting requirements for short-term employee benefits and employee termination benefits
  • Identify a defined contribution post-employment plan and its related accounting requirements

Take me to this course!

Employee Benefits: Defined Benefit Plans and Other Issues under IAS 19

Defined benefit plans are a type of post-employment benefit within the scope of IAS 19 where an entity has a legal (or constructive) obligation to make additional contributions in order to pay all of its agreed upon employee benefits related to current and prior service.

In this CPE-eligible eLearning course (1.0 CPE), you’ll learn about the accounting requirements for defined benefit plans. The key components of defined benefit plan accounting are the defined benefit obligation (DBO) and the fair value of plan assets. Depending on the balances of those two key components, a plan will be funded (there are plan assets available to settle the plan’s obligations) or unfunded (no assets are set aside, and benefits must be paid directly by the employer).

Additionally, we discuss other important considerations and issues (e.g., the asset ceiling, settlements, curtailments, amendments, and “other” long-term employee benefits). By the end of the course, you should be able to:

  • Identify the key components of a defined benefit plan and recognize the related accounting requirements for each component under IAS 19
  • Recall important considerations for defined benefit plans and the accounting requirements for other long-term employee benefits

Take me to this course!

We hope you enjoy our eLearning courses on IAS 19! If you buy the course collection, you’ll receive 30% off the list price! As always, please let us know if you have any questions or are looking for any other accounting topics!

About GAAP Dynamics  

We’re a DIFFERENT type of accounting training firm. We don’t think of training as a “tick the box” exercise, but rather an opportunity to empower your people to help them make the right decisions at the right time. Whether it’s U.S. GAAP training, IFRS training, or audit training, we’ve helped thousands of professionals since 2001. Our clients include some of the largest accounting firms and companies in the world. As lifelong learners, we believe training is important. As CPAs, we believe great training is vital to doing your job well and maintaining the public trust. We want to help you understand complex accounting matters and we believe you deserve the best training in the world, regardless of whether you work for a large, multinational company or a small, regional accounting firm. We passionately create high-quality training that we would want to take. This means it is accurate, relevant, engaging, visually appealing, and fun. That’s our brand promise. Want to learn more about how GAAP Dynamics can help you? Let’s talk!


This post is published to spread the love of GAAP and provided for informational purposes only. Although we are CPAs and have made every effort to ensure the factual accuracy of the post as of the date it was published, we are not responsible for your ultimate compliance with accounting or auditing standards and you agree not to hold us responsible for such. In addition, we take no responsibility for updating old posts, but may do so from time to time.

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