IAS 19 is an international accounting standard issued by the International Accounting Standards Board. In accordance with Czech Accounting Standards (CAS), it is also appropriate to recognize a provision for employee benefits, where companies commonly use, as market practice, the method for calculating provisions under IAS 19. The standard prescribes the method of accounting for and reporting of employee benefits. We help companies calculate liabilities and expenses through actuarial valuations, data collection, and the use of actuarial methods.
Provisions for employee benefits
Why is it necessary to calculate and report provisions for employee benefits?
- Do you provide employees with long-term benefits – whether as part of statutory obligations or beyond legal requirements, such as long-term bonuses, jubilee awards, pension plans, or insurance?
- Does your company have a collective agreement?
- Does your company follow international accounting standards?
- Do you want to gain an accurate overview of the amount of your liabilities and better plan future costs?
Did you answer yes to any of these questions and don’t currently have an actuary on your team? Contact our specialists, who will help you recalculate employee benefits in accordance with IAS 19.
And why choose PwC for the recalculation?
- Global trust: We are a recognized brand known for quality and credibility. Working with us enhances the transparency and reliability of your company.
- Market leadership: We are one of the largest audit and advisory firms in the Czech Republic.
- Top-tier team: Our specialists are members of the Czech Society of Actuaries (Česká společnost aktuárů).
- Regulatory expertise: We have a thorough understanding of the requirements and obligations related to external reporting, valuation, and disclosures under IFRS and Czech Accounting Standards, as well as the requirements for effective and efficient internal assessments for management purposes under IFRS and Czech GAAP.
- Extensive experience: We have extensive experience with recalculations, both in audits and for various clients.
- European reach: We also provide our Employee Benefits and Pensions calculation services in other European countries.
- Comprehensive support: Our methods are based on audit procedures, and we provide comprehensive tailored advisory services.
- Reliable results: We ensure an accurate and reliable presentation of liabilities in the financial statements.
IAS 19 is a standard issued by the International Accounting Standards Board that prescribes the accounting and reporting approach to employee benefits. IAS 19 requires companies to report, in their financial statements, the costs of providing employee benefits such as pension contributions, post-employment healthcare, or other long-term employee benefits.
The standard requires companies to use actuarial methods to calculate the costs of these benefits (actuarial valuation). We perform this actuarial valuation, helping companies calculate their liabilities and costs arising under IAS 19. Our work typically consists of the following steps:
- Reviewing employee benefit plans and determining the key assumptions to be used in the actuarial valuation (e.g., discount rates, mortality rates, or expected salary growth).
- Collecting employee data from the company (e.g., age, years of service, remuneration, or entitlements to employee benefits).
- Calculating the present value of expected future benefit payments to employees using actuarial methods and procedures, taking into account the key assumptions.
- Assessing the impact of changes in the employee benefit plan, including any curtailments or settlements that may have occurred during the period.
- Preparing a report summarizing the results of the actuarial valuation, including the liabilities and costs arising under IAS 19 to be recognized in the company’s financial statements.
By providing these services, we help companies meet the requirements of IAS 19 as well as Czech Accounting Standards (CAS). We also help ensure that their financial statements and notes reflect accurately the costs of providing employee benefits under IAS 19 and the related disclosures in the notes to the financial statements in accordance with IAS 19.
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