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AASB 119 adopts the projected unit credit method for the measurement of long service leave obligations. This method requires the entity to:
A) calculate the future value of the expected payments that will result from employee services provided in the future.
B) calculate the present value of the expected future payments that will result from employee services provided to date.
C) provide for the amount of long service leave that is planned to be taken by employees within the next 12 months.
D) commence providing for long service leave once employees have completed 10 years of service.
Projected Unit Credit Method
An actuarial technique used to estimate the present value of defined benefit obligations and related current service costs for pension plans.
Long Service Leave Obligations
Obligations to employees arising from their entitlement to long service leave, a form of employee leave based on extended service to an employer.
Present Value
The current worth of a future sum of money or stream of cash flows given a specified rate of return.
- Assess liabilities and recognize duties associated with employee service.
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Learning Objectives
- Assess liabilities and recognize duties associated with employee service.
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