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CA Final · Financial Reporting · Ind AS 19 Employee Benefits

Which of the following changes would require Meghna Pharma Ltd to consider whether a benefit it classified as a short-term employee benefit still meets the definition of short-term employee benefits under Ind AS 19?

A change in the benefit's characteristics, such as from non-accumulating to accumulating, requires Meghna to reconsider short-term classification. Ind AS 19 requires this reassessment also if a change in settlement timing is not temporary, but a merely temporary timing change does not.

  1. AA one-month temporary delay in settling the benefit because of a payroll system migration
  2. BA change of the benefit from non-accumulating to accumulating, altering its characteristicsCorrect
  3. CA rise in the market yield on government bonds at the reporting date
  4. DA small change in the number of employees entitled to the benefit

Explanation

Ind AS 19 gives the example of a change from a non-accumulating to an accumulating benefit as a change in characteristics, which requires the entity to reconsider whether the benefit remains short-term. A temporary delay in timing (option A) does not require reclassification. Bond yields affect discounting of long-term obligations, not this classification test.

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