7/23/2019 PAS19r

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The Revised Philippine Accounting Standards (PAS) 19, Employee Benefits (PAS 19R), has became effective or 

applicable for financial reports beginning on or after Januar 1, !"1#$ This means that all companies %ith calendar 

ear ending &ecember #1, !"1# shall full appl the recognition, measurement, presentation and disclosure

re'uirements of this standard must be complied %ith$ And es, even the 'uarterl reports of listed companies should

alread reflect the changes of this PAS 19R$

hanges introduced b this standard, especiall of defined benefit obligation, ranges from removing the corridor approach* in accounting for actuarial gains and losses to prescribing additional disclosure on the composition of the

plan assets, the sensitivit of the defined benefit obligation, maturit analsis and man more+ e %ill postseparatel

an analsis of the changes this PAS 19R introduced, for the mean time, chec- out the technicalsummar %hich can

be our guide to full understand the concepts$ .ou can alread tell the changes if ever ou are familiar %ith the old

PAS 19$

Below is the technical summary of this standard:

/mploee benefits are all forms of consideration given b an entit in e0change for service rendered b emploees or 

for the termination of emploment$

The obective of this Standard is to prescribe the accounting and disclosure for emploee benefits$ The

Standard re'uires an entit to recognise2

1$ a liabilit %hen an emploee has provided service in e0change for emploee benefits to be paid in the future3

and

!$ an e0pense %hen the entit consumes the economic benefit arising from service provided b an emploee in

e0change for emploee benefits$

This Standard shall be applied b an emploer in accounting for all emploee benefits, e0cept those to %hich P4RS !

Share5based Pament applies$

Short-term employee benefits

Short5term emploee benefits are emploee benefits (other than termination benefits) that are e0pected to be settled

%holl before t%elve months after the end of the annual reporting period in %hich the emploees render the related

service$

hen an emploee has rendered service to an entit during an accounting period, the entit shall recognise

the undiscounted amount of short5term emploee benefits e0pected to be paid in e0change for that service2

1$ as a liabilit (accrued e0pense), after deducting an amount alread paid$ 6f the amount alread paid

e0ceeds the undiscounted amount of the benefits, an entit shall recognise that e0cess as an asset (prepaid

e0pense) to the e0tent that the prepament %ill lead to, for e0ample, a reduction in future paments or a cash

refund$

!$ as an e0pense, unless another P4RS re'uires or permits the inclusion of the benefits in the cost of an asset

(see, for e0ample, PAS !, Inventories and PAS 17, Property, Plant and Equipment )$

Post-employment benefits

Post5emploment benefits are emploee benefits (other than termination benefits and short5termemploee benefits)

that are paable after the completion of emploment$ Post5emploment benefit plans are formal or informal

arrangements under %hich an entit provides post5emploment benefits for one or more emploees$ Post5

emploment benefit plans are classified as either defined contribution plans or defined benefit plans, depending on

the economic substance of the plan as derived from its principal terms and conditions$