AASB 119: Employee Benefits - Accounting Standards and Applications

JMD1491 ACCOUNTING
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Objective, Application, and Scope
Accounting standard AASB 119 is being followed for the purpose of the measurement and
accounting of the Employee Benefits. The recognition of the liability is to be considered by the
entity if any services are being rendered by the employee towards the employee benefit and also
when there are any expenses incurred due to the suppression of the employee benefits by the
entity. The entity needs to follow the Accounting standard and imply the financial reports of the
entity are being prepared with respect to the Corporation act and if the financial statements are
being general purpose financial statements as well as of reporting entity (AASB Standards,
2011). The standard is to be followed by the employer in calculating the employee benefits but
not for those for which there is the application of AASB 2 Share-based payment applies.
The standard consists of the following:-
 The contract has been established between the employee or the group of employees and
Employer or the one representing.
 To meet the statutory and legislation obligation as enforced.
 Any practices which have resulted in the obligation because of its informal nature that
may hamper the relationship with the employees of the company and left no chance for
the entity except providing the employee benefits.
Employee benefits consist of the following:-
 Short-term benefits at the end of reporting period if to be settled within the time frame of
12 months for the services provided such as salaries and wages, payment of the leaves
taken due to any sickness or annual leave allowed, sharing of the profit that is being
earned and the benefits which are non-monetary such as the housing, car expenses.
 Benefits that are being provided after the employment such as the pensions or payment
on lump sum basis or the benefits related to the health such as life insurance or medical
care (AASB Standards, 2011).
 The long-term service benefits or benefits provided at the time of long-term leaves and
benefits provided due to any disability.
 Benefits provided at the time of termination of the employees.
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