IAS 19 — Termination benefits


In June 2005, the IASB published an Exposure Draft of Amendments to IAS 19 Employee Benefits (1998) dealing with the accounting for termination benefits, together with proposed amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets. With regard to termination benefits, the IASB proposed:

  • termination benefits to encourage employees to leave service voluntarily (voluntary termination benefits) should be recognised when employees accept the entity's offer of those benefits.
  • termination benefits provided as a result of an entity terminating employment (involuntary termination benefits) should be recognised when the entity has communicated its plan of termination to the affected employees and the plan meets specified criteria, unless the involuntary termination benefits are provided in exchange for employees' future services (i.e. in substance they are a 'stay bonus'). In such cases, the liability for those benefits should be recognised over the period of the future service.

In October 2009, the Board tentatively decided to finalise those IAS 19 amendments separately and that entities should apply the amendments for annual periods beginning on or after 1 January 2011 with early adoption permitted.


Current status of the project

This project has been completed. The IASB issued IAS 19 Employee Benefits on 16 June 2011.


Project milestones

30 June 2005 Exposure Draft Proposed Amendments to IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' and IAS 19 'Employee Benefits' published Comment deadline 28 October 2005
2 June 2011 Near-final Draft of revised IAS 19 published
16 June 2011 IAS 19 Employee Benefits issued Effective for annual periods beginning on or after 1 January 2013

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