IAS 19 prescribes the accounting for all types of employee benefits except share-based payment, to which IFRS 2 applies. Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment. IAS 19 requires an entity to recognise:
These are recognised when the employee has rendered the service and are measured at the undiscounted amount of benefits expected to be paid in exchange for that service.
Plans providing these benefits 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:
These are all employee benefits other than short-term employee benefits, post-employment benefits and termination benefits. Measurement is similar to defined benefit plans.
Termination benefits are employee benefits provided in exchange for the termination of an employee’s employment. An entity recognises a liability and expense for termination benefits at the earlier of the following dates:
In April 2001 the International Accounting Standards Board (Board) adopted IAS 19 Employee Benefits, which had originally been issued by the International Accounting Standards Committee in February 1998. IAS 19 Employee Benefits replaced IAS 19 Accounting for Retirement Benefits in the Financial Statements of Employers (issued in January 1983). IAS 19 was further amended in 1993 and renamed as IAS 19 Retirement Benefit Costs.
The Board amended the accounting for multi‑employer plans and group plans in December 2004. In June 2011 the Board revised IAS 19; this included eliminating an option that allowed an entity to defer the recognition of changes in net defined benefit liability and amending some of the disclosure requirements for defined benefit plans and multi‑employer plans.
In November 2013 IAS 19 was amended by Defined Benefit Plans: Employee Contributions (Amendments to IAS 19). The amendments simplified the requirements for contributions from employees or third parties to a defined benefit plan, when those contributions are applied to a simple contributory plan that is linked to service.
Other Standards have made minor consequential amendments to IAS 19, including Annual Improvements to IFRSs 2012–2014 Cycle (issued September 2014), Annual Improvements to IFRS Standards 2014–2016 Cycle (issued December 2016), IFRS 17 Insurance Contracts (issued May 2017), Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) (issued February 2018) and Amendments to References to the Conceptual Framework in IFRS Standards (issued March 2018).