Employee Benefits and Discounting under AASB 119

This study material from Desklib discusses employee benefits and discounting under AASB 119, with a focus on compliance, accounting, and expenses. The material covers the types of employee benefits, discounting components, and compliance with AASB 119. It also includes a table of employee benefits expenses and references for further reading.

Running head: ADVANCED CORPORATE ACCOUNTING
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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
The Employee Benefits Mentioned Under the AASB 119..........................................................2
Accounting or Employee Benefits and Discounting under AASB 119.......................................3
Compliance with the AASB 119.................................................................................................3
Conclusion.......................................................................................................................................4
Reference.........................................................................................................................................5

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Introduction
The various types of employee benefits and the various forms of these benefits provided by the
company is an important aspect for the employees of the company. The company selected for the
analysis is the Woolworths Group and the financial report for the year 2017, is considered for the
analysis of the employee benefits it gives to its employees. Various aspects of compliance with
the company in accordance with the AASB 119 is important for the company.
Discussion
The Employee Benefits Mentioned Under the AASB 119.
The Employee Benefits is well briefed in accordance with the Australian Accounting Standards
(AASB 119). The various types of employee benefits discussed and which should be in
accordance with the AASB 119 under the short-term employee benefits are:
 Salary, Wages and Other Security Social Contributions.
 Annual Paid Leave and other medical leave
 Sharing Of Profits in the form of bonus
The post-employment benefits and others benefits that are there in the AASB 119 are:
 Retirement and other benefits like pensions arrangement
 Term Insurance and other long-term medical care benefits.
Long-term benefits to the existing and old employees are:
 Paid leave
 Disability benefits in the long term.

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Other benefits linked to termination of employees.
Accounting or Employee Benefits and Discounting under AASB 119.
The components of the Employee benefits that needs to be discounted under the AASB 119 are:
 Market Based Performance paid to the employers and the assets linked to it are valued at
the fair value and is calculated by including the grant date and using a Monte Carlo
Model. The probability approach is used in getting or determining the market based
performance and then calculating the fair value of the assets (Pagès, 2018).
 Non- Market Based performance components like the Earnings per share and the sales
per trading for the company is calculated by using the Black Scholes Merton model for
discounting purpose and determining the retention rights of the employees.
Compliance with the AASB 119
The Company has complied with the AASB 119 and has included benefits to the employees
under the heads and classification, which it should. The employee defined benefits covered by
the company are relating to the remuneration costs and other on costs and benefits provided. The
principal or the primary assumptions taken under the classified head were discount rate used
which was around 3.8%. The expected rate of increase in salary was taken to be around 2.5%.
Inflation Rate assumption for the components was around 2%. The Superannuation fund setup by
the company for the employees and the share based expenses, which the company provides to its
employees. The share-based compensation for the company is covered under the long-term
incentive plan. The company also has retention and attraction benefits and rights for its
employees. The company also has a recognition and a share plans for the company in contrast to

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the performance of the employees. The company has other plans for the employees of the
company in relating to the Share Schemes, Retirement Plans and which include the Defined
Contribution Plans and the defined benefits plans and there accounting and recognition by the
company (Leung, 2015).
Employee Benefits Expenses
Particulars 2018 2017
%
Change
Remuneration Benefits 7581 7337 3.33%
Expenses For Superannuation Fund 575 535 7.48%
Share Based Payments and Expenses 58 52 11.54%
Total 8214 7924 3.66%
Conclusion
The various types of employee benefits and the same acknowledged by the company for the
employees of the company is discussed. The employee benefit expenses like the defined benefit
plan are required to be discounted and should be in accordance with the AASB 119. The certain
92%
7%
1%
Employee Benefits Expenses
Remuneration Benefits
Expenses For
Superannuation Fund
Share Based Payments and
Expenses

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principal assumptions taken for the same and the underlying components are discussed. Finally
the compliance of the company with the AASB 119 is discussed with the components and the
benefits it provides.
Reference
Leung, A. P. (2015). The Fisher Hypothesis and Its Implications for Defined Benefits. Asia-
Pacific Journal of Risk and Insurance, 9(1), 107-124.
Pagès, G. (2018). The Monte Carlo Method and Applications to Option Pricing. In Numerical
Probability (pp. 27-47). Springer, Cham.