Determine the amount of termination benefits and short term employee benefit in accordance with IAS 19 ?
Due to recent acquisition, Adaro Co Ltd plans to close a factory in 10 months and, at that time, terminate employment of all of the remaining employees at the factory. Because Adaro Co Ltd needs the expertise of the employees at the factory to complete some contracts, it announce a plan of termination as follows.
Each employee who stand and renders service until the closure of the factory will receive on the termination date a cash payment of CU 50,000, employees leaving before the closure of the factory will receive CU 20,000.
There are 1,200 employees at the factory . At the time of the announcing the plan, Adaro Co Ltd expects 200 of them to leave before the closure
Required :
Determine the amount of termination benefits and short term employee benefit in accordance with IAS 19 ?
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