2.
Summary of significant accounting policies (cont’d.)
2.22 Employee benefits
2.22.1 Short term employee benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the financial year
in which the associated services are rendered by the employees of the Group.
2.22.2 Defined contribution retirement plan
The Group’s contributions to the Employees’ Provident Fund are charged to income statement in the financial year to
which they relate. Once the contributions have been paid, the Group has no further obligations. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
2.22.3 Defined benefit plan
The costs of providing benefits under defined benefit plans are determined separately for each plan using the projected
unit credit actuarial valuation method. Actuarial gains and losses are recognised as income or expense when the net
cumulative unrecognised actuarial gains and losses for each individual plan at the end of the previous reporting year
exceeded 10% of the higher of the defined benefit obligation and the fair value of plan assets at that date. These gains or
losses are recognised over the expected average remaining working lives of the employees participating in the plans.
The past service cost is recognised as an expense on a straight-line basis over the average period until the benefits
become vested. If the benefits are already vested immediately following the introduction of, or changes to, a pension
plan, past service cost is recognised immediately.
The defined benefit liability is the aggregate of the present value of the defined benefit obligation and actuarial gains and
losses not recognised, reduced by past service cost not yet recognised and the fair value of plan assets out of which the
obligations are to be settled directly. If such aggregate is negative, the asset is measured at the lower of such aggregate
or the aggregate of cumulative unrecognised net actuarial losses and past service cost and the present value of any
economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan.
If the asset is measured at the aggregate of cumulative unrecognised net actuarial losses and past service cost and
the present value of any economic benefits available in the form of refunds from the plan or reductions in the future
contributions to the plan:
– Net actuarial losses of the current period and past service cost of the current period are recognised immediately to
the extent that they exceed any reduction in the present value of those economic benefits. If there is no change or an
increase in the present value of the economic benefits, the entire net actuarial losses of the current period and past
service cost of the current period are recognised immediately.
– Net actuarial gains of the current period after the deduction of past service cost of the current period exceeding any
increase in the present value of the economic benefits stated above are recognised immediately. If there is no change
or a decrease in the present value of the economic benefits, the entire net actuarial gains of the current period after
the deduction of past service cost of the current period are recognised immediately.
The Group’s right to be reimbursed of some or all of the expenditure required to settle a defined benefit obligation is
recognised as a separate asset at fair value when and only when reimbursement is virtually certain.
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
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AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS
266