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WorkpaperIAS 19 — Employee BenefitsL1 · L2 · L3

Accrual of short-term employee benefits: salaries, accumulating absences, bonus or profit sharing and constructive obligation

2 missions9 sections to document60 min

Prepared by: AI-assisted draft
Reviewed by: Not reviewed — human review required
Status: Published

Objective of the workpaper

Record the benefits due at the closing date, their settlement date, the bonus formula and the past practice. Each benefit is recognised at the undiscounted amount expected to be paid; the judgment on the constructive obligation is supported, and the amounts, formulas and practices are case data.

9 sections · 20 blocks · 3 calculations · 3 entries

IAS 19 §11
IAS 19 §13
IAS 19 §19

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

2 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity

Short-term benefits: accrual for salaries, accumulating absences and a bonus with a constructive obligation

Case tasks documented here

Compute the accrual for the unused accumulating absences.
Is there a constructive obligation to pay the bonus at the closing date?
Compute the bonus to be recognised.
Compute the total short-term benefit liability.
Record the December salaries still due.
Record the accrual for the accumulating absences.
Record the bonus.

Facts and data

Inputs

Short-term benefits due at the closing date: nature, beneficiaries and settlement date
TextRequired
DECEMBER_SALARIES_CARRIED_FORWARD_LEAVE_AND_ANNUAL_BONUS_ALL_SETTLED_WITHIN_TWELVE_MONTHS
Salaries of the period still due at the closing date (case data)
Number
184,000
Unused accumulating absences, first group of employees: days carried forward × cost per day (case data)
Number
25,200
Unused accumulating absences, second group of employees (case data)
Number
11,700
Base profit of the bonus formula (case data)
Number
4,250,000
Percentage of the bonus formula (case data)
Number
3 %
Bonus or profit sharing: formula, communication to employees, past practice and date the amount is fixed
TextRequired
FORMULA_ADOPTED_AND_COMMUNICATED_AND_PAID_EVERY_YEAR_SINCE_20X1

Supporting documents

Evidence

Documents obtained and referenced (payroll, leave statement, bonus plan rules, minutes)
EvidenceRequired

Analysis: category, settlement date and undiscounted amount

Analysis

IAS 19 §11IAS 19 §13IAS 19 §19

Points examined: category and measurement of the benefits
ChecklistRequired
- Settlement expected in full within twelve months after the closing date (case fact)
- Undiscounted amount expected to be paid, with no discounting
- Accumulating absences: accrual for the days carried forward at the closing date
- Non-accumulating absences: no accrual, expense when the absence occurs
- Termination offer still withdrawable: outside short-term benefits, a termination benefit

Calculations

IAS 19 §11IAS 19 §13IAS 19 §19

Accrual for accumulating absences (sum of the amounts by group)
Calculation
36,900
Unused accumulating absences, first group of employees: days carried forward × cost per day (case data) ; Unused accumulating absences, second group of employees (case data)
Bonus or profit sharing (base profit × percentage)
Calculation
127,500
Base profit of the bonus formula (case data) ; Percentage of the bonus formula (case data)
Total short-term benefit liability (salaries, absences, bonus)
Calculation
348,400
Salaries of the period still due at the closing date (case data) ; Accrual for accumulating absences (sum of the amounts by group) ; Bonus or profit sharing (base profit × percentage)

Illustrative entries

Entries

Salaries still due at the closing date
Entry
Account Debit Credit
Employee benefit expense 184,000
Accrued benefit liability 184,000
Unused accumulating absences
Entry
Account Debit Credit
Employee benefit expense 36,900
Accrued benefit liability 36,900
Bonus or profit sharing
Entry
Account Debit Credit
Employee benefit expense 127,500
Accrued benefit liability 127,500

Account	Debit	Credit
Employee benefit expense	184,000
Accrued benefit liability		184,000

Account	Debit	Credit
Employee benefit expense	36,900
Accrued benefit liability		36,900

Account	Debit	Credit
Employee benefit expense	127,500
Accrued benefit liability		127,500

Judgment: constructive obligation to pay the bonus

Judgment

IAS 19 §11IAS 19 §13IAS 19 §19

Existence of an obligation (legal or constructive) to pay the bonus and reliable estimate of the amount
JudgmentRequired
Obligation exists and the amount is estimable: accrual
Obligation exists and the amount is estimable: accrual / No obligation at the closing date: no accrual / Obligation exists but the amount cannot be estimated reliably
Professional judgment: a past practice may leave the entity no realistic alternative but to pay the bonus; the case supplies the facts, the conclusion remains supported.
Rationale: formula, communication, past practice and amount fixed before the financial statements are authorised for issue
Text
THE_COMMUNICATED_FORMULA_AND_THE_PAST_PRACTICE_LEAVE_NO_REALISTIC_ALTERNATIVE_TO_PAYING

Effect on the financial statements

FS impact

Effect derived from the entries
Table

Conclusion

Conclusion: short-term benefit liability, constructive obligation and entries
ConclusionRequired

Normative references

References

Normative references cited in this workpaper
References

Checks and financial statement impact

Benefits due recordedPass
Formula and past practice recordedPass
Judgment on the constructive obligation recordedPass
Total liability = salaries + absences + bonusPass
Salaries entry balancedPass
Absences entry balancedPass
Bonus entry balancedPass

Assets: 0
Liabilities: 348,400
Profit or loss: -348,400
OCI: 0
Equity: -348,400

File and entity

Year-end employee benefits file: plan classification, short-term benefits, cost of a defined benefit plan, plan event and asset ceiling

Case tasks documented here

Compute the accrual for the unused leave that can be carried forward.
Is there an obligation at the closing date for the annual bonus and for the exceptional bonus of February?
Compute the annual bonus to recognise.
Compute the total short-term benefit liability.
Record the December salaries still due.
Record the accrual for the leave.
Record the annual bonus.

Facts and data

Inputs

Short-term benefits due at the closing date: nature, beneficiaries and settlement date
TextRequired
DECEMBER_SALARIES_CARRIED_FORWARD_LEAVE_AND_ANNUAL_BONUS_ALL_SETTLED_WITHIN_TWELVE_MONTHS
Salaries of the period still due at the closing date (case data)
Number
96,000
Unused accumulating absences, first group of employees: days carried forward × cost per day (case data)
Number
12,000
Unused accumulating absences, second group of employees (case data)
Number
6,000
Base profit of the bonus formula (case data)
Number
3,000,000
Percentage of the bonus formula (case data)
Number
2 %
Bonus or profit sharing: formula, communication to employees, past practice and date the amount is fixed
TextRequired
FORMULA_ADOPTED_AND_COMMUNICATED_AND_PAID_EVERY_YEAR_SINCE_20X2_WHILE_THE_FEBRUARY_BONUS_HAS_NO_EARLIER_ANNOUNCEMENT_OR_PRACTICE

Supporting documents

Evidence

Documents obtained and referenced (payroll, leave statement, bonus plan rules, minutes)
EvidenceRequired

Analysis: category, settlement date and undiscounted amount

Analysis

IAS 19 §11IAS 19 §13IAS 19 §19

Points examined: category and measurement of the benefits
ChecklistRequired
- Settlement expected in full within twelve months after the closing date (case fact)
- Undiscounted amount expected to be paid, with no discounting
- Accumulating absences: accrual for the days carried forward at the closing date
- Non-accumulating absences: no accrual, expense when the absence occurs
- Termination offer still withdrawable: outside short-term benefits, a termination benefit

Calculations

IAS 19 §11IAS 19 §13IAS 19 §19

Accrual for accumulating absences (sum of the amounts by group)
Calculation
18,000
Unused accumulating absences, first group of employees: days carried forward × cost per day (case data) ; Unused accumulating absences, second group of employees (case data)
Bonus or profit sharing (base profit × percentage)
Calculation
60,000
Base profit of the bonus formula (case data) ; Percentage of the bonus formula (case data)
Total short-term benefit liability (salaries, absences, bonus)
Calculation
174,000
Salaries of the period still due at the closing date (case data) ; Accrual for accumulating absences (sum of the amounts by group) ; Bonus or profit sharing (base profit × percentage)

Illustrative entries

Entries

Salaries still due at the closing date
Entry
Account Debit Credit
Employee benefit expense 96,000
Accrued benefit liability 96,000
Unused accumulating absences
Entry
Account Debit Credit
Employee benefit expense 18,000
Accrued benefit liability 18,000
Bonus or profit sharing
Entry
Account Debit Credit
Employee benefit expense 60,000
Accrued benefit liability 60,000

Account	Debit	Credit
Employee benefit expense	96,000
Accrued benefit liability		96,000

Account	Debit	Credit
Employee benefit expense	18,000
Accrued benefit liability		18,000

Account	Debit	Credit
Employee benefit expense	60,000
Accrued benefit liability		60,000

Judgment: constructive obligation to pay the bonus

Judgment

IAS 19 §11IAS 19 §13IAS 19 §19

Existence of an obligation (legal or constructive) to pay the bonus and reliable estimate of the amount
JudgmentRequired
Obligation exists and the amount is estimable: accrual
Obligation exists and the amount is estimable: accrual / No obligation at the closing date: no accrual / Obligation exists but the amount cannot be estimated reliably
Professional judgment: a past practice may leave the entity no realistic alternative but to pay the bonus; the case supplies the facts, the conclusion remains supported.
Rationale: formula, communication, past practice and amount fixed before the financial statements are authorised for issue
Text
THE_COMMUNICATED_FORMULA_AND_THE_PAST_PRACTICE_LEAVE_NO_REALISTIC_ALTERNATIVE_TO_PAYING_THE_ANNUAL_BONUS

Effect on the financial statements

FS impact

Effect derived from the entries
Table

Conclusion

Conclusion: short-term benefit liability, constructive obligation and entries
ConclusionRequired

Normative references

References

Normative references cited in this workpaper
References

Checks and financial statement impact

Benefits due recordedPass
Formula and past practice recordedPass
Judgment on the constructive obligation recordedPass
Total liability = salaries + absences + bonusPass
Salaries entry balancedPass
Absences entry balancedPass
Bonus entry balancedPass

Assets: 0
Liabilities: 174,000
Profit or loss: -174,000
OCI: 0
Equity: -174,000

Facts and data

Inputs

Short-term benefits due at the closing date: nature, beneficiaries and settlement date
TextRequired
Salaries of the period still due at the closing date (case data)
Number
Unused accumulating absences, first group of employees: days carried forward × cost per day (case data)
Number
Unused accumulating absences, second group of employees (case data)
Number
Base profit of the bonus formula (case data)
Number
Percentage of the bonus formula (case data)
Number
Bonus or profit sharing: formula, communication to employees, past practice and date the amount is fixed
TextRequired

Supporting documents

Evidence

Documents obtained and referenced (payroll, leave statement, bonus plan rules, minutes)
EvidenceRequired

Analysis: category, settlement date and undiscounted amount

Analysis

IAS 19 §11IAS 19 §13IAS 19 §19

Points examined: category and measurement of the benefits
ChecklistRequired
- Settlement expected in full within twelve months after the closing date (case fact)
- Undiscounted amount expected to be paid, with no discounting
- Accumulating absences: accrual for the days carried forward at the closing date
- Non-accumulating absences: no accrual, expense when the absence occurs
- Termination offer still withdrawable: outside short-term benefits, a termination benefit

Calculations

IAS 19 §11IAS 19 §13IAS 19 §19

Accrual for accumulating absences (sum of the amounts by group)
Calculation
Unused accumulating absences, first group of employees: days carried forward × cost per day (case data) ; Unused accumulating absences, second group of employees (case data)
Bonus or profit sharing (base profit × percentage)
Calculation
Base profit of the bonus formula (case data) ; Percentage of the bonus formula (case data)
Total short-term benefit liability (salaries, absences, bonus)
Calculation
Salaries of the period still due at the closing date (case data) ; Accrual for accumulating absences (sum of the amounts by group) ; Bonus or profit sharing (base profit × percentage)

Illustrative entries

Entries

Salaries still due at the closing date
Entry
Debit Employee benefit expense ← Salaries of the period still due at the closing date (case data) ; Credit Accrued benefit liability ← Salaries of the period still due at the closing date (case data)
Unused accumulating absences
Entry
Debit Employee benefit expense ← Accrual for accumulating absences (sum of the amounts by group) ; Credit Accrued benefit liability ← Accrual for accumulating absences (sum of the amounts by group)
Bonus or profit sharing
Entry
Debit Employee benefit expense ← Bonus or profit sharing (base profit × percentage) ; Credit Accrued benefit liability ← Bonus or profit sharing (base profit × percentage)

Judgment: constructive obligation to pay the bonus

Judgment

IAS 19 §11IAS 19 §13IAS 19 §19

Existence of an obligation (legal or constructive) to pay the bonus and reliable estimate of the amount
JudgmentRequired
Obligation exists and the amount is estimable: accrual / No obligation at the closing date: no accrual / Obligation exists but the amount cannot be estimated reliably
Professional judgment: a past practice may leave the entity no realistic alternative but to pay the bonus; the case supplies the facts, the conclusion remains supported.
Rationale: formula, communication, past practice and amount fixed before the financial statements are authorised for issue
Text

Effect on the financial statements

FS impact

Effect derived from the entries
Table

Conclusion

Conclusion: short-term benefit liability, constructive obligation and entries
ConclusionRequired

Normative references

References

Normative references cited in this workpaper
References