IAS 19

Employee benefits - all forms of employee benefits and payments for work performed ^[4] :

• short-term remuneration, including wages, annual paid leave, bonuses, paid sick leave, contributions to social insurance funds, in-kind rewards (medical care, housing and motor transport, free or dated goods or services)
• long-term benefits, such as will not be paid within 12 months after the end of the reporting period: long service leave, benefits for long-term temporary disability, bonuses for long-term work
• post-retirement benefits, pensions, other post-retirement benefits, life insurance and post-employment health care
• severance pay.

Short-term employee benefits - employee benefits (other than termination benefits) payable in full within 12 months after the end of the period in which employees provide related services. The difference between the amount recognized and actual payments should be accounted for as a liability or an advance payment.

Post-employment benefit plans - agreements whereby an enterprise pays benefits to one or more employees of the company at the end of their employment:

• defined contribution pension plans - post-employment benefit plans in which the company transfers contributions of a specified amount to the fund, the employee is at risk of running out of funds
• Defined benefit pension plans - post-employment benefit plans in which the company transfers employee benefits of a certain amount, the risk of a shortage of funds lies with the company.

Reflection in the financial statements of defined contribution pension plans ^[5] :

• liabilities and expenses of the company for each period are determined by contributions paid during this period,
• liabilities are measured at a discounted basis,
• on an accrual basis in the statement of comprehensive income reflects expenses in the amount of contributions payable during the reporting period
• The statement of financial position recognizes a liability for contributions.

Reflection in financial statements of defined benefit plans ^[6] :

• The statement of financial position presents the net liability / asset of the plan:

• if the obligation exceeds the asset, the excess amount, which is the plan deficit, will be presented in the obligations section
• if the asset exceeds the liability, the excess amount, which is the surplus of the plan, will be presented in the assets section.

The amount of movement of the net liability / asset for the reporting year will be included in the statement of comprehensive income and broken down into components ^[7] :

• the cost of services , which includes the cost of current and past services, as well as the final calculations according to the plan, are charged to profit / loss for the year
• financial (net financial expenses / income) , calculated as the product of the deficit / surplus on the pension plan and the discount rate used to measure the liability, is charged to profit / loss for the year
• A change in estimates consisting of actuarial gains and losses for the reporting year and income from plan assets, net of the amounts included in the financial component, is charged to other comprehensive income for the year.

Cost of current services - increase in the discounted cost of defined benefit obligations in connection with work performed by an employee in the current period.

The cost of past services is the increase in the discounted value of defined benefit pension liabilities in connection with the work of employees performed during past periods that arises in the current period as a result of the introduction of new or changes to existing benefits upon completion of employment or other long-term benefits.

The liabilities of the plan are measured at a discounted basis, and the assets of the plan are measured at fair value. The cost of past services arises upon the introduction of a pension plan or the improvement of the conditions of an existing pension plan. Employees have the right to receive remuneration upon termination of employment in connection with work that was performed during previous periods. The cost of past services may be an expense (with the introduction of new or an increase in the amount of previous payments) or a decrease in expense (with a decrease in existing payments) ^[7] .

When evaluating its defined benefit obligations, the company took into account the cost of past services as an expense (expense reduction) as follows ^[7] :

• if employees receive the right to receive remuneration under the plan immediately, then it is considered that the employees have already entered into the rights for these remuneration and the costs of these remunerations are immediately charged to profit / loss
• if employees receive the right to receive remuneration according to the plan not immediately, but on some day later, then it is considered that the employees will enter the rights in the future on that day, however, the costs of these remunerations are nevertheless immediately recognized in profit / loss of the year.

The final settlement according to the plan occurs as a result of a transaction that terminates all further legal and practical obligations in respect of any part or the entire amount of the pension provision. Gains or losses arising from the final settlement of the defined benefit pension plan are recognized at the time of the final settlement ^[7] :

• arising changes in the present value of the defined benefit obligation
• Changes in the fair value of pension plan assets
• relevant actuarial income and expenses, as well as the value of past services that were not previously reflected.

Information is disclosed in the notes to the financial statements ^[7] :

• amount recognized as defined contribution expense
• explanation of the characteristics of the defined benefit plan and the associated risks
• Indication and explanation of the amounts in the financial statements related to the defined benefit plan
• A description of how a defined benefit plan can affect the amount, time and uncertainty of future cash flows.