Recognition and Measurement :
The amount recognised as a liability for other long-term employee benefits should be the net total of the following amounts:
(a) the present value of the defined benefit obligation at the balance sheet date (see paragraph 65);
(b) minus the fair value at the balance sheet date of plan assets (if any) out of which the obligations are to be settled directly (see paragraphs 100-102). In measuring the liability, an enterprise should apply paragraphs 49-91, excluding paragraphs 55 and 61. An enterprise should apply paragraph 103 in recognising and measuring any reimbursement right.
For other long-term employee benefits, an enterprise should recognise the net total of the following amounts as expense or (subject to paragraph 59) income, except to the extent that another Accounting Standard requires or permits their inclusion in the cost of an asset:
(a) current service cost (see paragraphs 64-91);
(b) interest cost (see paragraph 82);
(c) the expected return on any plan assets (see paragraphs 107-109) and on any reimbursement right recognised as an asset (see paragraph 103);
(d) actuarial gains and losses, which should all be recognised immediately;
(e) past service cost, which should all be recognised immediately; and
(f) the effect of any curtailments or settlements (see paragraphs 110 and 111).
One form of other long-term employee benefit is longterm disability benefit. If the level of benefit depends on the length of service, an obligation arises when the service is rendered. Measurement of that obligation reflects the probability that payment will be required and the length of time for which payment is expected to be made. If the level of benefit is the same for any disabled employee regardless of years of service, the expected cost of those benefits is recognised when an event occurs that causes a long-term disability.
Provided that a Small and Medium-sized Company as defined in Appendix I to this Compendium and a Small and Medium-sized Enterprise (Levels II and III non-corporate entities), as defined in Appendix I to this Compendium, whose average number of persons employed during the year is 50 or more, may not apply the recognition and measurement principles laid down in paragraphs 129 to 131 in respect of accounting for other long-term employee benefits. However, such companies/ enterprises should actuarially determine and provide for accrued liability in respect of other long-term employee benefits as follows:
• The method used for acturial valuation should be the Projected Unit Credit Method; and
• The discount rate used should be determined by reference to market yields at the balance sheet date on government bonds as per paragraph 78 of the Standard.
Provided further that a Small and Medium-sized Enterprise (Levels II and III non-corporate entities), as defined in Appendix I to this Compendium, whose average number of persons employed during the year is less than 50 may not apply the recognition and measurement principles as laid down in paragraphs 129 to 131 in respect of accounting for other long-term employee benefits. However, such enterprises may calculate and account for the accrued liability under the other long-term employee benefits by reference to some other rational method, e.g., a method based on the assumption that such benefits are payable to all employees at the end of the accounting year.