Does contract gratuity paid to an employee after five years of service fall within IAS 19 and shoul it be valued

Question

Contract gratuity is paid to staff at x number of years per the contract multiplied by the salary at the end of each year of service. We make a provision in the accounts at the end of each year. If no valuation is done, can we still discount.

What would be the double entry for the discount.

Comments

Why do you want to discount?

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Since this is a long term liability payable say five years in future does ifrs not require discounting in the same manner as environmental liabilities for instance

Answer 1

There is no need to discount it since by multiplying employees latest salary with X number of years, we are calculating total actual liability as at calculation date and not at any future data (as in case of discounting of dismantling cost of plant at the end of its useful life)