Employee benefits obligation

In February 2017, the Federation of Accounting Professions (“FAP”) issued the following response to a question about recognizing an employee benefits obligation if a company has not set a certain retirement age, or does not have a policy on a retirement age.

Keywords: Mazars, Thailand, Accounting, FAP, Employee Benefits Obligation

07 March 2017

An employee benefits obligation is recognized if, as a result of a past event, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

If the company does not have a retirement age policy, the company does not have a constructive obligation, so no outflow of economic benefits will be required.

As a result, where there is no employee benefits obligation, there is no requirement to recognize a liability for such in the company’s financial statements.

For more information (in Thai), please visit Federation of Accounting Professionals