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Important Stuff on Ind AS 19, Employee Benefits

Indian Accounting Standard (Ind AS) 19, Employee Benefits, Important Material

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Ind AS 19: Employee Benefits

Employee benefits are all forms of consideration given directly to an employee or their spouses, children or other dependents and to other such as trust, insurance companies in exchange of service provided by an employee.

Employee: As per this standard employee includes whole time directors and management personnel. It is applicable to all forms of employer-employee relationships whether it is formal or not.

Generally ‘outsourcing contract’ will not meet the definition of employer-employee relationship. However, contracts should be carefully examined to distinguish between a “contract of service” and a “contract for services”.

A “contract for services” means a contract for rendering services, and a ‘contract of service’ means a relationship of an employer and employee and the person is obliged to obey orders in the work to be performed.


The objective of this Standard is to prescribe the accounting treatment and disclosure for employee benefits. The Standard requires an entity to recognise:
(a) a liability when an employee has provided service in exchange for employee benefits to be paid in the future; and
(b) an expense when the entity consumes the economic benefit arising from service provided by an employee in exchange for employee benefits.


This Standard shall be applied by an employer in accounting for all employee benefits, except those to which Ind AS 10 Share-based Payment applies.

However, this Standard does not deal with reporting by employee benefit plans.

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