Defined Contribution Scheme

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Short-term Employee Benefits

Benefits payable within a year after work is done, such as wages, paid vacation and sick leave, bonuses etc. should be recognised when work is done.

Profit-sharing and Bonus Payments

Recognise when there is an obligation to make such payments and a reliable estimate of the expected cost can be made.

Defined contribution plan

  • The enterprise pays fixed contributions into a fund and has no further obligations.

  • The contribution payable is recognised in the income statement for that period.

  • If contributions are not payable until after a year they must be discounted.

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