Short-term compensated absences Profit-sharing and bonus plans

Chapter 17 – Employee Benefits Page 239 13 Self Test Questions Chapter 17 1. According to IAS19 Employee benefits, which ONE of the following terms best describes benefits which are payable as a result of an entitys decision to end an employees employment before the normal retirement date? A Post-employment benefits B Defined contribution plans C Termination benefits D Defined benefit plans 2. According to IAS19 Employee benefits, which ONE of the following statements best describes other long-term employee benefits? A Benefits not falling due wholly within twelve months of the end of the period in which the service is rendered B Benefits which fall due within twelve months of the end of the period in which the service is rendered C Benefits payable as a result of an entitys decision to end an employees employment before the normal retirement date D Benefits which are payable after completion of employment 3. Should the following items be included in plan assets, according to IAS19 Employee benefits? 1 Assets held by a long-term employee benefit fund. 2 Qualifying insurance policies. Item 1 Item 2 A No No B No Yes C Yes No D Yes Yes Chapter 17 – Employee Benefits Page 240 4. Under which category should the following items be accounted for according to IAS19 Employee benefits? 1 Lump sum benefit of 1 of the final salary for each year of service. 2 Actuarial gains. A Lump sum benefit should be accounted for under defined benefit plans Actuarial gains should be accounted for under defined benefit plans B Lump sum benefit should be accounted for under short term employee benefits Actuarial gains should be accounted for under defined benefit plans C Lump sum benefit should be accounted for under defined benefit plans Actuarial gains should be accounted for under defined contribution plans D Lump sum benefit should be accounted for under short term employee benefits Actuarial gains should be accounted for under defined contribution plans 5. The Palu Company has issued a range of share options to employees. In accordance with IFRS2 Share-based payment, what type of share-based payment transaction does this represent? A Asset-settled share-based payment transaction B Equity-settled share-based payment transaction C Cash-settled share-based payment transaction D Liability-settled share-based payment transaction 6. In accordance with IFRS2 Share-based payment, how, if at all, should an entity recognise the change in the fair value of the liability in respect of a cash-settled share-based payment transaction? A Should not recognise in the financial statements but disclose in the notes thereto B Should recognise in the statement of changes in equity C Should recognise in other comprehensive income D Should recognise in profit or loss Chapter 17 – Employee Benefits Page 241 7. Under IFRS2 Share-based payment, in which ONE of the following will a cash-settled share-based payment give rise to an increase? A A current asset B A non-current asset C Equity D A liability 8. Are the following statements about a cash-settled share-based payment transaction true or false, according to IFRS2 Share-based payment? 1 The fair value of the liability should be remeasured at the end of each reporting period. 2 The fair value of the liability should be remeasured at the date of settlement. Statement 1 Statement 2 A False False B False True C True False D True True 9. Are the following statements about share options granted to employees in exchange for their services true or false, according to IFRS2 Share-based payment? 1 The services received should be measured at the fair value of the employees services. 2 Fair value should be measured at the date the options vest. Statement 1 Statement 2 A False False B False True C True False D True True