2-1-04 Employee Benefits

Accounting and disclosure requirements of employee benefits (defined benefit plan) are complicated especially  for small and medium-sized entities that do not have enough specialized  accountants. Although Japanese GAAP allow small entities to recognize employee benefits liability without actuarial calculations, International Financial Reporting Standards and FASB Accounting Standards require all entities to recognize employee benefits liability with actuarial calculations. Our employee benefits accounting services are as follows.

  1. Define client’s current employee benefits plans
  2. Investigate available accounting treatment
  3. Select actuary who calculate defined benefit obligation
  4. Enter into an agreement with designated actuary and submit employee data for calculation
  5. Receive calculations of defined benefit obligation as of prior year end and fiscal year end
  6. Prepare spread sheet of defined benefit liability and calculate defined benefit expense and defined benefit liability including current service cost, interest cost expected return on plan assets and actuarial gains/(losses)
  7. Book current defined benefit expense and defined benefit liability
  8. Project next year’s defined benefit expense budget