Bennet Co. has a 31 December year-end and has a defined contribution plan for its employees. Under this plan, employees contribute 50,000 per month and Bennet Co. is required to make a matching 50,000 per month contribution within 45 days of the employees' contribution being made (therefore, a total contribution of 600,000 per year) . During 20X4, Bennet Co. makes contributions of 500,000 into the plan. What total expense is recognized in profit or loss for 20X4?
A. 500,000 in profit or loss, as the expense to be booked under IAS 19 is the amount paid by the employer during the period
B. 500,000 in profit or loss for the amounts contributed by Bennet Co. and 600,000 in OCI for the amounts contributed by employees
C. 600,000 in profit or loss, as this is the amount owed by Bennet Co. for 20X4
D. 1,100,000 in profit and loss, as this is the total amount paid to the plan in 20X4
Under IAS 19, the expense to be recognized in profit or loss for a defined contribution plan like the one described for Bennet Co. is the amount contributed by the employer during the period. Since Bennet Co. made contributions of 500,000 into the plan in 20X4, the total expense recognized in profit or loss for 20X4 would be that amount.
A. 500,000 in profit or loss, as the expense to be booked under IAS 19 is the amount paid by the employer during the period
