Accounting for Defined Contribution Plans

XYZ Corporation has recently implemented a new employee compensation strategy, which includes a defined contribution plan for its employees. Under this plan, the company contributes a fixed percentage of each employee's salary to their individual retirement accounts. Employees can choose how to allocate these contributions among various investment options. As part of its financial reporting, XYZ Corporation needs to disclose the cost associated with this defined contribution plan in its financial statements.

Which of the following statements is true regarding the accounting treatment of defined contribution plans under IFRS?