DipIFR Syllabus B. Elements of financial statements - Defined Contribution Scheme - Notes ^{4 / 4}

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.