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CMA Intermediate · Corporate Accounting and Auditing · Employee Benefits (Ind AS 19)

Ind AS 19 prescribes a simplified method for accounting for other long-term employee benefits compared with post-employment defined benefit plans. Which statement describes that difference correctly?

Under the simplified method for other long-term employee benefits, remeasurements are not recognised in other comprehensive income. This differs from post-employment defined benefit plans, where remeasurements go to OCI. The simplification exists because measurement of these benefits is usually less uncertain.

  1. ARemeasurements of the net liability are recognised in other comprehensive income
  2. BRemeasurements are not recognised in other comprehensive income under this methodCorrect
  3. CNo liability is recognised until the benefit is paid
  4. DThe benefit is always measured at undiscounted amounts

Explanation

The standard says the measurement of other long-term benefits is less uncertain, so a simplified method applies. Unlike post-employment benefits, this method does not recognise remeasurements in other comprehensive income. The option about OCI is therefore wrong, as it describes post-employment accounting.

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