The undiscounted accrual

Learning objectives

• Explain that short-term employee benefits are recognised at the undiscounted amount expected to be paid, as an expense and a liability, unless they are included in the cost of an asset.L1
• Recognise the accrued expense for a short-term benefit from the data of a case.L2

Normative references

• IAS 19 §11Short-term employee benefits expected to be paid in exchange for service rendered are recognised at the undiscounted amount, as a liability and an expense, unless another Standard requires or permits their inclusion in the cost of an asset; given their short maturity, no discounting is applied.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

2 questions

• The December salaries of Pelmont SA, payable on 10 January, are recognised at the 31 December reporting date at their undiscounted amount: the settlement period is too short to justify discounting.L1
• Delmar SA closes its books on 31 December. December salaries ({salaries}), December overtime ({overtime}) and the transport allowance due for December ({transport}) will be paid on 8 January. January salaries ({january_salaries}) will pay for services of the following year. Calculate the short-term benefit liability to recognise at 31 December, without discounting.L2