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Accounting Standard Covered For Employee Benefits - Woolworths Group

INTRODUCTION

Advanced corporate accounting is the branch that is implied a general accounting principle that helps the company in managing stability in business functions. Employee benefits are part of Advanced corporate accounting and therefore the presentation will outline the benefits of providing advantages to workers of Woolworth Group. Woolworth Group is the second-largest retail chain in Australia and serves millions of buyers every day. The assessment will outline employee benefits which need to be discounted with Accounting Standard AASB 119 employee benefits.

MAIN BODY

Employee benefits and various forms in which these benefits are applicable in the Woolworth group

Employees benefits are a crucial part of the business where the focus of management is on providing advantages in kind which comprise compensation, medical aid, pension, transportation services, gratuity, sick leaves, life insurance, etc. Corporate social responsibility enables the strict structure to business for setting employee benefits with the help of which the management is able to segregate welfare plans comprise short and long term benefits and post-employment plans (Guthrie, Evans and Burritt, 2014). The welfare plans help the workers in developing trust over organisational changes and functions. It is managed by the firm for employee retention and building long term relationships with staff.

This assist firm in gaining employees loyalty and increasing their working experience with organisation. Woolsworth is focused on welfare of its workforce which is denoted by its current and non-current provision. On the basis of current employee benefits provision account, the amount has increased from 2017 to 2018 that is from 915 million $ to 1018 million $. Moreover, the firm provides accruing annual leaves and long service leave to its every worker. Likewise, the value of employee welfare is on the basis of individual wages and salary which keeps on increasing and decreasing according to performance.

Employee benefits needs to discounted in accordance with AASB119

As per Australian Accounting Standard Board, it is the liability of firm to launch benefits to employees for the services which the individuals are giving to firm. The board states about welfare where it is the responsibility of an enterprise to pay workforce a charge which is consumed by entity from economic benefit that is generated from services provided workers (Islam and et.al., 2017). Discounting employee’s benefits derives the present value of current service cost. As per AASB discounting, employee benefits is necessary because it helps in deriving fair values of assets. Discounts rate refers to time value of money but not investment risk and actuarial.

In accordance with Australian Accounting Standard Board two employee benefits are given discount that is post-employment and long term like, dividend, gratuity, pension, etc. (Woolworths Group: Annual report, 2018) The rate used to discount post-employment advantage obligations (both funded and unfunded) shall be implied with regard to market yields at the end of reporting period. As per discount rate by AASB119, it can be said that it does not reflect credit risk of specific enterprise.

Compliance with AASB119

Structure of corporate social responsibility of Woolworths denotes its responsibility for compliance with AASB 119. CSR structure of company is focused on providing employee welfare and therefore the retailer has complied with Australian accounting standard Board which helps the business in managing balance between earnings benefits to employee. Woolworth has complied with AASB119 because it assists the firm in gaining employees trust towards welfare plans and schemes (AASB Standard: Employee Benefits, 2018). On the basis of the discounted rate of Board, the retailer sets welfare plans for workers where post-employment and long term welfare schemes are offered according to current market and economic conditions.

The firm has complied with the standard board because it helps the accounting management in balancing current earning and employee’s welfare. Share rights are approved in total fair value of share rights which are granted during the financial year determined by an autonomous actuary which is recognised in employee benefits expense over vesting time span as per Australian Accounting Standards. Hence, compliance with compliance with AASB 119 is mandatory as it helps board and government in monitoring and controlling organisational activities.

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CONCLUSION

The presentation summarized employees benefits that are provided by organisations to protect workers interests with the firm. Some benefits which are encouraged by Woolworth, the second-largest supermarket chain in Australia are annual leaves, long service leave, medical aid, pension, etc. It outlined welfare schemes that need to be discounted according to the Australian accounting standard Board that is long term and post-employment benefits. It concluded by deriving compliance of retailer with standards of AASB119.

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