ACF2100 Lecture Notes - Lecture 6: Employee Benefits, Precondition, Profit Sharing

• School: Monash Caulfield
• Department: Accounting
• Course: ACF2100
• Professor: Michelle (Chenlan) Song

Document Summary

Employer required to recognised a liability when an employee provides service in exchange for employee benefits to be paid in the future. Employer required to recognize an expense when it consumes the economic benefits associated with the service provided by an employee in exchange for employee benefits. Employee benefits may be recognised as part of the cost of an asset when the benefits of the services provided contribution to making the asset, such as inventories or self-constructed property, plant and equipment. Subsequently recognised as expenses when the asset to which they have been capitalised is sold or depreciated. Nominal measurement basis undiscounted amount is used to measure short-term employee benefits (i. e wages, annual leave) Present value measurement basis discounted amount used to measure long-term emplyee benefits (i. e long service leave) In the early years of services (5,7,10 years), long-service leave does not vest if employment ceases, the employee has no entitlement: conditional period.