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Tag Archives: Employee Benefits

What Are Short Term Paid Absences

Employees may be entitled to be paid during certain absences, such as annual recreational leave or short periods of illness. Some entities also offer other forms of paid leave, including maternity leave, parental leave, carers’ leave and bereavement leave. Entitlements to short-term paid absences are those entitlements that are expected to be settled within 12 months after the end of the reporting period. Short-term paid absences may be either accumulating or non-accumulating. Non-accumulating paid absences are leave entitlements that the employee may not carry forward to a future period. For …

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Practice In Profit Sharing And Bonus Plans

Employers may offer profit-sharing arrangements and bonuses to their employees. Bonuses may be determined as a lump-sum amount or based on accounting or market-based measures of performance. Many large companies use bonuses in management incentive schemes. For example, the remuneration received by the senior executives of  Oxfame International Ltd includes base salary, bonuses linked to performance (incentive-based remuneration) and superannuation benefits. The components of remuneration for the chief executive officer (CEO) for 2009 to 2011 are shown the decline in total remuneration in 2011 resulted from lower incentive-based remuneration. This …

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Determining The Remeasurements Of Net Defined Benefit Liability

Determining The Re-measurements Of The Net Defined Benefit Liability: The effects of remeasurements of the net defined benefit liabilities or assets are recognized in section of other comprehensive income. Changes in the net defined benefit liability or asset that result from remeasurements comprise the actuarial gains and losses, return on plan assets (other than amounts included in the net interest) and any changes in the effect of the asset’s ceiling minus amounts included in net interest. Actuarial gains and losses occur when changes in actuarial assumptions or experience adjustments affect …

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The Steps Involved In Long Service Leave Measurement

Long-term employee benefits that are provided to employees during the period of their employment. A common form of long-term employee benefits is long service leave, which is a paid absence after the employee has provided a long period of service to the organization, such as 3 months of paid leave after 10 years of continuous employment. There are certain steps involved in the measurement of a liability for long service leave. The steps involved in the measurement of a liability for long service leave : 1. Estimate the number of …

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Accounting For Defined Contribution Post-Employment Plans

Entities that participate in defined contribution post-employment plans make payments to a post-employment benefit fund, such as a superannuation fund. The amount is determined as a percentage of remuneration paid to employees who are members of the fund. Contributions payable to defined contribution funds are recognized in the period the employee renders services. The contributions payable during the period are recognized as expenses unless another standard permits the cost of employment benefits to be allocated to the carrying amount of an asset, such as internally constructed plant in accordance with …

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Other Long-Term Employee Benefits As Per IAS 19

Other Long-Term Employee Benefits As Per IAS 19: Long-term employee benefits are benefits for services provided in the current period that will not be paid until more than 12 months after the end of the period. Long-term employee benefits that are provided to employees during the period of their employment. A common form of long-term employee benefits is long service leave, which is a paid absence after the employee has provided a long period of service, such as 3 months of paid leave after 10 years of continuous employment. Long …

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Purpose of Defined Benefit Worksheet

There are two re-measurements of the net defined benefit asset. (a) Return on plan asset (b) Actuarial gains and losses . Return on plan asset:  One of the re-measurements results from the return on plan assets exceeding the interest income included in net interest recognized in profit or loss. The return on plan assets affects the fair value of plan assets. Actuarial gains and losses : The other re-measurement results from the increase in the discount rate used to measure the present value of the DBO (defined benefit obligation). This …

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Superannuation Fund: Amounts To Be Recognized In Profit Or Loss

Determining The Amounts To Be Recognized In Profit Or Loss of Superannuation Fund: The amount of the net defined benefit liability (asset) is affected by the present value of the defined benefit obligation and the fair value of plan assets. The present value of the defined benefit obligation is affected by the service cost, which comprises current service cost, past service cost and any gain or loss on settlement of the defined benefit. Current service cost is ‘the increase in the present value of defined benefit obligation resulting from employee …

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Types Of Post Employment Benefit Plans

Post-employment benefits are benefits, other than termination benefits  that are payable after completion of employment, typically after the employee retires. Where post-employment benefits involve significant obligations, it is common for employers to contribute to a post-employment benefit plan for employees. For example, in Australia, it is compulsory for most private sector employers to contribute to a superannuation plan for employees. Post-employment benefit plans are defined in para 8 of IAS 19 as: formal or informal arrangements under which an entity provides post-employment benefits for one or more employees. Other Names …

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Accounting For Annual Leave Journal Entries

Accounting For Annual Leave Journal Entries

Southern Lindley has four employees in its Mississippi branch. Each employee is entitled to 20 days of paid recreational leave per year, referred to as annual leave . At 1 July 2012, the balance of the provision for annual leave was $4360. During the year employees took a total of 70 days of annual leave, which cost Southern Lindley $9160. After annual-leave taken during the year had been recorded, the provision for annual leave account had a debit balance of $4800 in the trial balance at 30 June 2013 before end-of-period …

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