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Employee benefits

Defined contribution plans

2.1 Accounting for defined contribution plans

The entity should charge the agreed pension contribution to profit or loss as an
employment expense in each period.

The expense of providing pensions in the period is often the same as the amount of
contributions paid. However, an accrual or prepayment arises if the cash paid does
not equal the value of contributions due for the period.

Illustrations and further practice

Now try TYU 2 from Chapter 8.

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