09/12/2014

09/12/2014

Is your company ready for FRS 102? – Employee Benefits

Business Team

Part 9- Employee Benefits

Section 26 of FRS 102 applies to employee benefits. Where an employee has unpaid short term benefits at the year end, an accrual should be provided in the accounts. Short term benefits would include, for example;
  1. Wages & employers PRSI.
  2. Profit sharing bonuses
  3. Paid annual leave
  4. Paid sick leave
  5. Non-monetary benefits (Company car, health insurance etc.)
This will mean that a company will have to accrue for the cost of accumulating staff benefits where the employee renders services that increases their entitlement to future compensated absences. On transition to FRS 102, the above adjustment will give rise to a once off reduction in profitability in the company. Companies should be prepared for the transition by keeping a record of (and quantifying the cost of) untaken annual leave at their year end and of any other unpaid staff benefits.

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