Document ID: chunk:federal_register_of_legislation:F2023C00383:reg:4:p19
Version: federal_register_of_legislation:F2023C00383
Segment Type: reg
Provision Reference: reg 4 (pt 19/25)
Character Range: 114556–117448

benefit for termination of employment at the request of the employee (in substance, a post-employment benefit) than for termination of employment at the request of the entity. The difference between the benefit provided for termination of employment at the request of the employee and a higher benefit provided at the request of the entity is a termination benefit.
161 The form of the employee benefit does not determine whether it is provided in exchange for service or in exchange for termination of the employee's employment. Termination benefits are typically lump sum payments, but sometimes also include:
(a) enhancement of post-employment benefits, either indirectly through an employee benefit plan or directly.
(b) salary until the end of a specified notice period if the employee renders no further service that provides economic benefits to the entity.
162 Indicators that an employee benefit is provided in exchange for services include the following:
(a) the benefit is conditional on future service being provided (including benefits that increase if further service is provided).
(b) the benefit is provided in accordance with the terms of an employee benefit plan.
163 Some termination benefits are provided in accordance with the terms of an existing employee benefit plan. For example, they may be specified by statute, employment contract or union agreement, or may be implied as a result of the employer's past practice of providing similar benefits. As another example, if an entity makes an offer of benefits available for more than a short period, or there is more than a short period between the offer and the expected date of actual termination, the entity considers whether it has established a new employee benefit plan and hence whether the benefits offered under that plan are termination benefits or post-employment benefits. Employee benefits provided in accordance with the terms of an employee benefit plan are termination benefits if they both result from an entity's decision to terminate an employee's employment and are not conditional on future service being provided.
164 Some employee benefits are provided regardless of the reason for the employee's departure. The payment of such benefits is certain (subject to any vesting or minimum service requirements) but the timing of their payment is uncertain. Although such benefits are described in some jurisdictions as termination indemnities or termination gratuities, they are post-employment benefits rather than termination benefits, and an entity accounts for them as post-employment benefits.

Recognition
165 An entity shall recognise a liability and expense for termination benefits at the earlier of the following dates:
(a) when the entity can no longer withdraw the offer of those benefits; and
(b) when the entity recognises costs for a restructuring that is within the scope of AASB 137 and