The International Accounting Standard No. 19 “Employee Benefits” requires all commercial companies operating in the State of Kuwait to account for the liabilities and expenses arising from short-term, post-employment or employee termination benefits, as well as other long-term employee benefits.
Business entities seek advice from consulting firms to help them ensure the optimal application of the standard.
What employee benefits do IAS 19 apply to?
Employee benefits to which the standard applies include:
Short-term employee benefits, if they are expected to be fully settled twelve months before the end of the annual reporting period in which employees provide related services, including wages, salaries, social security contributions, and non-monetary benefits such as medical care, housing and transport allowances, etc.
Post-employment benefits such as retirement benefits, life insurance, and post-service medical care;
Other long-term employee benefits such as extended service leave, sabbatical leave for academic study, and long-term disability benefits
The above benefits may be payable by the company or payable through a fund established by the company for employees benefits.
What are the requirements of IAS 19 for Actuarial Assumptions?
IAS 19 requires companies to estimate the final cost borne by the company of the benefits granted to employees based on actuarial assumptions about the following:
Demographic variables (such as employee turnover, death rate).
Financial variables (such as future increases in salaries and medical costs) that will affect the cost of those benefits.
Why is the International Accounting Standard No. 19 binding on companies in Kuwait?
Companies Law No. 1 of 2016 requires all companies operating in the State of Kuwait to apply the International Financial Reporting Standards, and therefore any amendments or issues to those standards are deemed to be enforceable from the date of their effectiveness.
What is the timeframe for implementing IAS 19?
The International Accounting Standards Board (IASB) has set 01 January 2019 for starting the implementation of the standard.
What services does Baker Tilly provide in this regard?
Preparing and amending accounting policies
Calculating the actuarial estimates required to record the final cost borne by the company from the benefits granted to the employees.
Why Baker Tilly to provide this service?
Baker Tilly is distinguished by specialist professional experience and offers the following characteristics carrying added values to our clients as follows:
- A global consulting firm operating in the State of Kuwait;
- Baker Tilly is licensed by the Capital Markets Authority;
- Local experience under an umbrella of a global network;
- Professional team with in- depth experience in providing accounting consultancy services;
- Bilingual team.