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As a practice our company pay a lump-sum payment ($10000) for non-executive staff when they retire after at least 10 years of service. However there is no legal requirement for such a payment. Shall we consider this a defined benefit plan under IAS 19 and account for accordingly?
in IAS 19 - Employee Benefits by Level 1 Member (2.5k points)
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If your company does it as a practice for long time then it would make a constructive obligation towards the employees and it should be taken as a defined benefit plan and accounted accordingly as per IAS 19.
by Level 5 Member (11.6k points)