CERTYNEX IFRS ACADEMY

On 15 November, Solane SA offers its employees voluntary redundancy payments. Nothing prevents it from withdrawing the offer before an employee accepts it. One employee accepts on 10 December, another on 5 January. The year ends on 31 December and, at that date, Solane has recognised no IAS 37 restructuring costs that include termination payments (case facts). Which treatment is consistent at 31 December?

A liability and an expense for all the employees concerned, from the announcement of the offer on 15 November, since Solane has exposed itself to that expenditure.

A liability and an expense at the actual leaving date of each employee, because termination payments are recognised once the services have ended.

A liability and an expense for both employees, because the one who accepts on 5 January decided before the financial statements are issued.

A liability and an expense for the payment to the employee who accepted on 10 December, because Solane can no longer withdraw the offer in respect of that employee.