Employee Benefits for SMEs

1. Employee Benefits for SMEs Section 28, IFRS for SME vs. IAS 19

2. Similarities • Basically the same treatment for • Short-term benefits • Termination benefits

3. Differences – Defined Benefit Plans

4. Differences – Defined Benefit Plans

5. Differences – Defined Benefit Plans

6. Differences – Defined Benefit Plans

7. Differences – Defined Benefit Plans

8. Other Differences Defined Contribution Plans  discounting is not required if the contributions do not fall due wholly within 12 months after the end of the period Other Long-term benefits  PUCM is not required to be used for SMEs

9. Problem The following information is given about a funded defined benefit plan. To keep interest computations simple, all transactions are assumed to be made at the year-end. The present value of the obligation and the fair value of the plan assets were both Php1,000 at 1 January 20X1. In 20X2, the plan was amended to provide additional benefits with effect from 1 January 20X2. The present value as at 1 January 20X2 of additional benefits for employee service before 1 January 20X2 was Php50 for vested benefits and Php30 for non-vested benefits.

10. Problem As of 1 January 20X2, the entity estimated that the average period until the non-vested benefits would become vested was three years, while the average remaining service period is 5 years. The entity has adopted a policy of recognising actuarial gains and losses in profit or loss. There were no curtailments or settlements, and there were no actuarial gains or losses with respect to the plan assets.

11. Problem

12. Solution – IAS 19

13. Solution – IAS 19

14. Solution – IAS 19

15. Solution – IFRS for SME

16. Solution – IFRS for SME

17. Solution – IFRS for SME

18. Summary figures –Sec28 vs IAS 19