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

Under Ind AS 19, when should an entity recognise the expected cost of non-accumulating paid absences such as maternity leave?

The cost of non-accumulating paid absences is recognised when the absences occur. Unused entitlement lapses and employee service does not increase the benefit, so no liability or expense arises before the absence takes place.

  1. AWhen the employees render service during the year
  2. BWhen the absences occurCorrect
  3. CAt the end of the reporting period, based on the entitlement for the year
  4. DWhen the entity budgets for the leave

Explanation

Non-accumulating paid absences lapse if unused and do not increase future entitlement. Employee service does not increase the benefit, so no liability or expense arises until the absence takes place. Recognising it as service is rendered applies only to accumulating absences.

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