v) Employee Benefits
Short-term benefits
Short-term employee benefits are employee benefits (other than termination benefits) that are due to be fully settled within 12 months after the end of the reporting period in which the employees render the related services.
When an employee has rendered service to an entity during an accounting period, the entity shall recognize the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service:
a) as an expense, unless another IFRS requires or permits the inclusion of the benefits in the cost of an asset.
b) as a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, an entity shall recognize that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund.
Vacation expense
The annual cost of personnel vacation and benefits is recorded on an accrual basis.
Post-employment benefits
Post-employment benefits are employee benefits (other than termination benefits and short-term employee benefits) that are payable after the completion of employment. Post-employment benefit plans are formal or informal arrangements under which an entity provides post-employment benefits for one or more employees. Post-employment 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.
Other long-term benefits
Other long-term employee benefits include all employee benefits other than short-term employee benefits, post-employment benefits and termination benefits.
The standard requires a simplified method of accounting for other long-term employee benefits. In contrast to the accounting required for post-employment benefits, this method does not recognize new measurements in other comprehensive income.
Termination benefits
Termination benefits are employee benefits payable as a result of either:
a) an entity’s decision to terminate an employee’s employment before the normal retirement date; or
b) an employee’s decision to accept voluntary redundancy in exchange for those benefits.
An entity shall recognize termination benefits as a liability and an expense at the first of the following dates:
(i) when the entity no longer has a realistic possibility of withdrawal; or
(ii) when the entity recognizes restructuring costs that fall within the scope of IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” and involve the payment of termination benefits.