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Discounting of employee benefits in accordance with AASB119

Department of Infrastructure, Local Government and Planning

Purpose

This bulletin is to advise councils of the rates applicable to Commonwealth Government Securities as at 30 June 2017 for the purpose of discounting employee benefits under Australian Accounting Standard AASB119 Employee Benefits.

Background

The main features of AASB119 are:

  • 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.

Key points

The Commonwealth Bond yields at the close of business on 30 June 2017 were as follows:

table displaying Commonwealth Bond yields

Further information

Any further enquiries on this matter should be addressed to:

Lynne Marlow
Finance and Funding
Department of Infrastructure, Local Government and Planning
PO Box 15009
City East
Brisbane  QLD  4002
(07) 3452 6720
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