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Discounting of employee benefits in accordance with AASB119

Purpose

This bulletin is to advise councils of the rates applicable to Commonwealth Government Securities as at 30 June 2014 for the purpose of discounting employee benefits under the Accounting Standard AASB 119 Employee Benefits.

Overview

Main features of the Standard:

  • Prescribes general recognition and measurement criteria for employee benefits including wages and salaries, compensated absences, profit sharing and bonus plans, termination benefits and certain post-employment benefits;
  • Requires liabilities that arise in respect of short-term employee benefits (wages and salaries, leave entitlements and other employee benefits expected to be settled wholly within 12 months of the reporting date) to be measured at their nominal amounts;
  • Requires other long term employee benefit liabilities (e.g. long service leave not expected to be settled wholly within 12 months after the reporting date) to be measured at present value;
  • Requires the market yields on government bonds to be used in determining the present value of other long term employee benefit liabilities;
  • Requires disclosures to be made.

The Tropical illustrative financial statements model provides further guidance on classification of leave entitlements.

Rates

The Commonwealth Bond yields at close of business on 30 June 2014 were as follows:

MaturingCouponMid Yield
Apr 20156.25%2.46%
Jun 20164.75%2.52%
Feb 20176.00%2.60%
Jan 20185.50%2.77%
Mar 20195.25%2.94%
Apr 20204.50%3.09%
May 2021 5.75%3.24%
Jul 20225.75%3.38%
Apr 20235.50% 3.45%
Apr 20242.75%3.54%

Further information

Any further enquiries on this matter should be addressed to:

Mrs Samantha Cieslar
Department of Infrastructure, Local Government and Planning
PO Box 15009
City East
Brisbane, QLD 4002
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.