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We calculate your employee benefit provision under IAS 19 and the Polish Accounting Act

Entities make accrued expenses (bierne rozliczenia międzyokresowe kosztów) arising, among other things, “from the obligation to provide, in connection with current activities, future benefits to employees, including retirement benefits” and show them in the balance sheet “as provisions for liabilities” (art. 39(2)(2) and (2a) of the Accounting Act). Micro and small entities may choose not to make them, but this does not apply to, among others, capital companies (art. 39(6) and (7)). Under KSR 6, which entities may apply when adopting accounting policies (art. 10(3)), in measuring retirement and similar benefits the entity applies IAS 19 Employee Benefits, and gains and losses from actuarial remeasurement “are always taken to the profit and loss account” (point 4.7).

Quotations from Polish sources are our translation.

We offer

If you are interested, our insurance mathematicians, certified by the National Bank of Slovakia, will provide:

  • Calculation of the provision
  • Consultation on setting the actuarial assumptions
  • Preparation of the necessary documentation
  • Answers to any questions you may have

Employee benefits for which a provision is made

  • Retirement severance pay (odprawa emerytalna)
  • Disability-pension severance pay (odprawa rentowa)
  • Death severance pay (odprawa pośmiertna)
  • Jubilee award (nagroda jubileuszowa)

Under KSR 6, “retirement and disability-pension severance pay and jubilee awards are long-term employee benefits that depend on length of service. Employees earn the right to these benefits throughout their employment with the entity” (point 3.14(c)). “The basis for measuring provisions for future employee benefits is labour law, pay regulations, collective agreements and other binding agreements between employers and employees” (point 4.7). More in the guide Jubilee award provision.

Severance pay under the Labour Code

“An employee who meets the conditions for a disability pension or a retirement pension, and whose employment ended in connection with going on a disability or retirement pension, is entitled to severance pay of one month’s remuneration” (art. 92¹ § 1 of the Labour Code).

“If an employee dies during employment, or while receiving, after its termination, a benefit for incapacity for work due to illness, the family is entitled to death severance pay from the employer” (art. 93 § 1). Its amount “depends on the employee’s period of employment with the given employer”: one month’s remuneration for employment shorter than 10 years, three months’ after at least 10 years and six months’ after at least 15 years (art. 93 § 2). More in the guide Retirement severance provision.

IAS 19

The consolidated financial statements of issuers of securities referred to in Art. 4 of Regulation (EC) No 1606/2002 and of banks “are prepared in accordance with IAS” (art. 55(5) of the Accounting Act). The non-consolidated financial statements of issuers of securities admitted to trading on a regulated market of a country of the European Economic Area, and of issuers applying or intending to apply for such admission, “may be prepared in accordance with IAS” (art. 45(1a)). This also applies to entities in a group whose parent prepares consolidated financial statements in accordance with IAS (para. 1b). The decision “is taken by the approving body” (para. 1c). Other cases are described on the page IAS 19.

References

  • Logo ALAS ALAS SLOVAKIA, s.r.o.
  • Logo Národná banka Slovenska Národná banka Slovenska
  • Logo Branson Branson Ultrasonics, a.s.
  • Logo CEMMAC CEMMAC a.s.
  • Logo Continental Logo Matador Continental Matador Rubber, s.r.o.

Contact

If you have any questions, please contact us.

E-mail:
info@ias19.pl

Address:
Augustus Consulting, s.r.o.
Exnárova 8
821 03 Bratislava
Slovakia

Sources