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Employee benefits - PowerPoint PPT Presentation

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Employee benefits. IPSAS Background. The objective of this Standard is to prescribe the accounting and disclosure for employee benefits. The Standard requires an entity to recognize:

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Presentation Transcript
ipsas background
IPSAS Background
  • The objective of this Standard is to prescribe the accounting and disclosure for employee benefits. The Standard requires an entity to recognize:
      • A liability when an employee has provided service in exchange for employee benefits to be paid in the future; and
      • An expense when the entity consumes the economic benefits or service potential arising from service provided by an employee in exchange for employee benefits.
  • As a result of applying IPSAS, greater amounts in employee benefits liabilities will be recognized on the face of the financial statements
ipsas background3
IPSAS Background
  • Liabilities and expenses are recognized when the employee renders a service, rather than when the benefits are paid. For example:
      • Annual leave
      • After Service Health Insurance
      • Repatriation grant, relocation grant, Shipment and travel expenses
      • Death, disability (MAIP, Appendix D)
  • Accrual accounting is providing an estimation of the full employee cost
ipsas background4
IPSAS Background
  • Different methods have to be applied according to the type of benefit:
  • Short term employee benefits:within 12 months after the employee rendered the service = salary, maternity leave, language allowance,…
  • Expenses are measured without discounting
  • Long term employee benefits:
    • Repatriation grant,…
    • ASHI
    • Death, disability
  • Often use actuarial methods and
  • are measured on a discounted
  • basis.


differences unsas to ipsas
Differences UNSAS to IPSAS



  • Recognition:
  • Optional: liabilities for annual leave, end-of-service benefits and post-retirement benefits, including after-service medical benefits, should be provided for in the financial statements to the extent required by the financial policies of the organization.
  • Presentation: is not specifically addressed
  • Disclosure: no specific requirements for employee benefits
  • Recognition
  • Employee benefit expenses are recognized when service is provided and not when paid
  • Actuarial valuation is applicable to long term benefits
  • Presentation: expenses and liabilities have to be reported in the financial statements
  • Disclosure: extensive note disclosures required for post employment benefits (for example, actuarial assumptions)