ACCA Strategic Professional · Strategic Business Reporting (International) · Employee benefits
Which of the following arrangements falls outside the scope of IAS 19 Employee Benefits and should instead be accounted for under another IFRS Accounting Standard?
Equity-settled share options granted to directors for services are outside IAS 19 because they are dealt with under IFRS 2 Share-based Payment. Cash bonuses, non-accumulating sick leave and non-monetary benefits like medical care for current employees are all short-term employee benefits under IAS 19.
- AShare options granted to directors in exchange for services, settled in equityCorrect
- BAnnual bonus payable in cash within three months of the year end
- CPaid sick leave that is non-accumulating
- DMedical care provided to current employees as a benefit in kind
Explanation
Share-based payment transactions are covered by IFRS 2, not IAS 19. Cash bonuses, non-accumulating sick leave and non-monetary benefits such as medical care for current employees are short-term employee benefits within IAS 19. The key distractor, the bonus, is within scope as a short-term benefit.
Did you get it right without looking?
One question tells you little. A timed set on Employee benefits shows your real accuracy, how long you take and where you lose marks.
More Employee benefits questions
- Kappa Co's directors wish to raise the discount rate used for its defined benefit obligation from 4% to 5.5%, based on yields on lower-rated…
- Parent Co acquired Sub Co, which operates a defined benefit plan. In Parent's consolidated financial statements for the year after acquisiti…
- Fjord Co's finance director asks you to delay recognising a $3 million past service cost from a plan amendment agreed on 15 December 20X5 un…
- Zeta Co operates a defined benefit plan. Its finance director proposes to omit the sensitivity analysis of the defined benefit obligation to…
- Brindle Co operates a profit-sharing plan under which it pays employees 3% of the profit for the year, after deducting the bonus itself, wit…
- Finance director of Rho Co asks the accountant to avoid recognising a $5m termination benefit liability at the year end, though the plan was…