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IFRS employee benefit liability valuation

The introduction of IFRS changed the way employers value the retirement and other long-term benefits they provide to their employees.

We have extensive experience providing the employee retirement liability outputs and reports necessary for IFRS.

Classification Content Liability valuation approach
Short-term employee benefits Benefit settlement after 12 months of employment Unrecognized liability
Considered as short-term expense
Retirement benefits Retirement benefit and other post-employment benefits
(medical insurance etc.)
Recognized liability
Using actuarial Projected Unit Credit method
Other long-term employee benefits Benefits for long-term employment Recognized liability
Using actuarial Projected Unit Credit method
Termination benefits Benefits for employment termination Unrecognized liability
Considered as short-term expense

Based on our audit experience with large accounting firms and more than 2000 companies’ employee trends and benefit regulation analysis, we have effectively provided the retirement benefit liability outputs and reporting that satisfies IFRS Exhibit No.1019 requirements.

Examples of the work we do:

  • Value defined-benefit pensions
  • Estimate compensation growth and retirement rates from experience data
  • Estimate appropriate discount rate by determining the duration of the liabilities
  • Use the Projected Unit Credit method to value defined-benefit pensions
  • Assess past-service costs and transfer value basis
  • Advise on asset recognition
  • Produce required outputs for IAS 19
  • Produce outputs for current-service cost, interest cost, plan assets, and expected earnings
  • Analyze actuarial profit and loss
  • Test sensitivity of major assumptions
  • Analyze movement of defined-benefit obligations and plan assets