Exploring the Nature of Social Security Scheme Trust Fund | Defined Benefit or Contribution Plans
- Blog|News|Account & Audit|
- < 1 minute
- By Taxmann
- |
- Last Updated on 6 May, 2024
Latest from Taxmann
According to Ind AS 19, “Employee Benefits,” a “Defined contribution plan” is a type of post-employment benefit plan where an enterprise contributes a fixed amount to a separate fund and has no further obligation to pay additional contributions if the fund lacks sufficient assets to cover all employee benefits for current and past service. On the other hand, “Defined benefit plans” include all post-employment benefit plans that are not defined contribution plans.
The primary differences between these two types of plans are as follows:
- In a defined contribution plan, an enterprise’s liability is limited to the contributions it makes to a fund for its employees, with no additional obligations.
- In contrast, defined benefit plans require the employer to provide the promised benefits to both current and former employees, which means the employer’s liability goes beyond just making contributions to the fund.
To determine how a company should account for a fund established for its employees’ benefits, it is crucial to ascertain the nature of the fund. The discussion here revolves around the nature of a Social Security Scheme Trust Fund, taking into account the Expert Advisory Committee’s (EAC) opinion on the matter.
Click Here To Read The Full Story
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
