Accounting for Employee Benefits (Pas 19)

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REACTION PAPER

The Seminar about “Accounting for Employee Benefits (PAS 19)” was held at Multi-Purpose Hall of Engineering Building last July 20, 2012. The speaker for this event was Mr. Ysmael Acosta. At first I was really curious about that seminar of what topic does the speaker would discuss. When the seminar goes on, there are some topic that are really interesting and some are not quite clear for me. Sometimes it makes me feel bored when listening to him because he really speak very fast, that’s why I can’t understand him very well.

For now, I would like to discuss those topics that makes me interested. Employee Benefits outlines the accounting requirements for employee benefits, including short-term benefits (like wages and salaries, annual leave), post-employment benefits such as retirement benefits, other long-term benefits (like long service leave) and termination benefits. The standard establishes the principle that the cost of providing employee benefits should be recognised in the period in which the benefit is earned by the employee, rather than when it is paid or payable, and outlines how each category of employee benefits are measured, providing detailed guidance in particular about post-employment benefits. The basic principle of PAS 19 is the cost of providing employee benefits should be recognised in the period in which the benefit is earned by the employee, rather than when it is paid or payable.

The objective of “PAS 19” as I remembered correctly, is to prescribe the accounting and disclosure for employee benefits (that is, all forms of consideration given by an entity in exchange for service rendered by employees). The principle underlying all of the detailed requirements of the Standard is that the cost of providing employee benefits should be recognised in the period in which the benefit is earned by the employee, rather than when it is paid or payable.

The scope of PAS 19 applies to wages and salaries; compensated absences (paid...
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