Woolworths Group: AASB 119 Employee Benefits Analysis and Presentation

This presentation analyzes Woolworths Group's employee benefits as reported in their 2018 annual report, focusing on compliance with Australian Accounting Standard AASB 119. The presentation identifies various employee benefits, including short-term benefits like salary, wages, paid leave, and profit sharing, as well as post-employment and long-term benefits such as retirement plans, insurance, and disability benefits. It details which employee benefits require discounting under AASB 119, specifically mentioning market-based and non-market-based performance components. The presentation then assesses Woolworths Group's compliance with AASB 119, highlighting the key assumptions used, such as discount rates, salary increase expectations, and inflation rates. Furthermore, it covers the company's superannuation funds, share-based compensation plans, and other employee schemes, emphasizing their accounting treatment and recognition. The analysis is supported by data from the annual report and relevant academic references.

Woolworth Group

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.
• 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 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).

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.