Skip to content

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

Which of the following is a feature of a defined benefit plan as described in Ind AS 19?

In a defined benefit plan, the entity's obligation is to provide the agreed benefits to current and former employees. Actuarial and investment risk fall in substance on the entity, and if experience is worse than expected its obligation may increase, unlike a defined contribution plan.

  1. AThe entity's legal or constructive obligation is limited to the contribution it agrees to pay
  2. BThe entity's obligation is to provide the agreed benefits to current and former employeesCorrect
  3. CInvestment risk falls in substance on the employee
  4. DBenefits are determined only by contributions and investment returns

Explanation

Under Ind AS 19, in a defined benefit plan the entity must provide the agreed benefits to current and former employees, and actuarial and investment risk fall in substance on the entity. The other options describe features of a defined contribution plan.

Did you get it right without looking?

One question tells you little. A timed set on Employee Benefits (Ind AS 19) shows your real accuracy, how long you take and where you lose marks.

Practise Employee Benefits (Ind AS 19)Free diagnostic mock

More Employee Benefits (Ind AS 19) questions