Post-Employment Benefits Accounting under IFRS

Medium Employee Compensation Post-employment Benefits

In a recent financial statement, XYZ Corporation reported a significant increase in its post-employment benefit obligations. Investors are particularly interested in understanding how these obligations impact the company's financial health. Post-employment benefits include retirement pensions, health care benefits, and other long-term employee benefits that are payable after employment ends.

Which of the following statements correctly describes the accounting treatment of post-employment benefits under International Financial Reporting Standards (IFRS)?

Post-employment benefits are recognized as expenses in the period they are earned by employees, not when they are paid.

Post-employment benefits should be fully funded at the end of each reporting period, and any underfunded status should be recognized as a liability.

Changes in actuarial assumptions regarding post-employment benefit obligations are recognized immediately in profit or loss.

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