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

Sundaram Textiles Ltd recognises termination benefits for a voluntary separation scheme at the end of its reporting period. The benefits are not an enhancement of post-employment benefits, and the whole amount is expected to be paid within six months after the reporting date. Which requirements apply to measurement of these termination benefits?

Short-term employee benefit requirements apply. Termination benefits that are not an enhancement of post-employment benefits and are expected to be settled wholly before twelve months after the end of the reporting period in which they are recognised are measured as short-term benefits.

  1. ARequirements for post-employment benefits
  2. BRequirements for short-term employee benefitsCorrect
  3. CRequirements for other long-term employee benefits
  4. DRequirements for share-based payments

Explanation

Termination benefits not being an enhancement to post-employment benefits follow short-term benefit requirements if expected to be settled wholly before twelve months after the end of the reporting period in which they are recognised. Six months satisfies this, so the other long-term requirements do not apply.

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