The Study On Chinese Post-employment Benifits Accounting

By the end of 2013, China’s elderly population (aged 60 and above) has reached 14.9% of the total population. This situation pushes the government to build a more and more sounder multiple level endowment insurance system. The retirement benefits that employees enjoy are also growing in diversity. Since retirement benefits accounting standard would involve multiple accounting elements, such as assets, liabilities, and fees, it has become the concern of professionals in the field of accountingIn 2014, the Ministry of Finance issued CAS No.9-Employee benefits, requiring all the public companies to carry out this new standard from July 1st 2014. This accounting standard introduces the post-employment benefit plans and its recognition, measurement and disclosure requirements. Based on this fact, the paper analyzes the basic theory and related concepts of post-employment benefit plans and makes comparisons between CAS and IAS as well as CAS and GAAP to provide the basis for improvement of accounting standards. In addition, this paper analyzes the implementation status of China’s listed companies on conducting the post-employment benefit plans standard based on companies’2014 annual reports to figure out the practical basis for perfecting the standard.This paper combines the normative research and statistical analysis to study Chinese post-employment benefits accounting.In normative research part, the paper begins with the analysis of theoretical basis of post-employment benefits accounting. Then it digs out the criterion of post-employment benefit plans and analyzes the accounting treatment of defined contribution plan and defined benefits plan. After thorough analysis of Chinese accounting standard, the article compares CAS with IAS and GAAP. The comparison focus is on the existing requirements of IAS that have not been introduced to CAS, and the different accounting treatments between CAS and GAAP.In statistical analysis part, the article discusses the implementation status of CAS by listed companies’using the 2014 annual reports. The article emphatically analyzes the basic situation of companies that have a defined benefit plan and identified 2 main motives to provide such plan:the first one is that companies set up or acquire overseas subsidiaries so that they bear the obligations due to its subsidiaries; the second reason is related to company reformation in 1990s. Besides, this article also analyzes the disclosure of listed companies and discovers that there are some enterprises that fail to disclose information as standard required or disclose inaccurately.Through the analysis of the difference between accounting standards in different regions and the performance of China’s listed companies conducting the standard, the article concluded that the standard should make clear rules about different types of post-employment benefit plans; instruct the enterprises how to deal with the layoff; employ the years-of-service amortization method or an accelerated amortization method in prior service cost. Moreover, some listed companies could not disclose adequately, so taking measures to enhance supervision is also advised.