Your friend started their own company a few years ago. During covid they experienced a lot of challenges, especially with leave pay. He also heard about IAS19 but is not sure what it is about. He is asking for your advice regarding short-term employee benefits, as well as your assistance based on the following information relating to the company: At the end of the current financial year being the 30 June 2022, the company has 80 middle managers, 20 top managers and 10 partners in the company. As compensation for their services, the following compensation packages are awarded: • Middle managers are compensated with an average salary of R900 000 per annum and have a total of 25 days annual leave. • Top managers are compensated with an average salary of R1 200 000 per annum, with a total of 22 days leave per annum. • Partners in the company are paid an average salary of R1 800 000 per annum. Per their employment contracts, annual leave may be carried forward for one financial period and is non-vesting. All employees are required to work 4 days per week throughout the year (at least 1 day in the office and 3 days remote / work-from-home), and there are 52 weeks in the year. The company is going through a restructure and employees are expected to resign at the beginning of the next financial year and will not be able to utilise their annual leave. Explain the objective of IAS19 - employee benefits.
Your friend started their own company a few years ago. During covid they experienced a lot of
challenges, especially with leave pay. He also heard about IAS19 but is not sure what it is about. He
is asking for your advice regarding short-term employee benefits, as well as your assistance based
on the following information relating to the company:
At the end of the current financial year being the 30 June 2022, the company has 80 middle
managers, 20 top managers and 10 partners in the company. As compensation for their services,
the following compensation packages are awarded:
• Middle managers are compensated with an average salary of R900 000 per annum and have
a total of 25 days annual leave.
• Top managers are compensated with an average salary of R1 200 000 per annum, with a
total of 22 days leave per annum.
• Partners in the company are paid an average salary of R1 800 000 per annum.
Per their employment contracts, annual leave may be carried forward for one financial period and
is non-vesting. All employees are required to work 4 days per week throughout the year (at least 1
day in the office and 3 days remote / work-from-home), and there are 52 weeks in the year.
The company is going through a restructure and employees are expected to resign at the
beginning of the next financial year and will not be able to utilise their annual leave.
Explain the objective of IAS19 - employee benefits.
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