Ind AS 118: Employee Benefits#
Types of Employee Benefits#
1. Short-term Benefits
- Salaries, wages
- Bonus, commission
- Paid leave (vacation, sick)
- Profit-sharing and bonuses
2. Post-employment Benefits
- Gratuity
- Provident Fund
- Pension schemes
- Medical benefits
3. Termination Benefits
- Voluntary retirement
- Severance pay
- Redundancy packages
Recognition#
Short-term Benefits
- Recognize as expense when service rendered
- Measure at undiscounted amount
Post-employment Benefits
Defined Contribution Plans
- Recognize as expense when contribution due
- No actuarial valuation needed
Defined Benefit Plans
- Recognize net defined benefit liability
- Actuarial valuation required
- Remeasurement to OCI
Accounting for Defined Benefit Plans#
Net Defined Benefit Liability = Present Value of DBO - Plan Assets
Components:
- Current service cost
- Past service cost
- Net interest expense
- Remeasurements
Disclosure Requirements#
- Description of benefit plans
- Assumptions used in valuation
- Amounts recognized in financial statements
- Sensitivity analysis
- Expected contributions for next period