ASPECTS OF ACCOUNTING TREATMENT AND ANALYSIS OF STAFF INCOME

Abstract

Together with fixed tangible assets and material resources, labour is among the key factors, which are necessary for the business of every enterprise and for the functioning of the national economy. As a result of the use of labour provided by the workforce, enterprises incur labour costs that comprise expenses for wages and salaries (remunerations) and expenses for social security and health insurance of workers and employees. In their nature, employers’ labour costs are wider in scope than employee benefits.
Accounting of employee benefits of enterprises that apply the national accounting regulations – National Accounting Standards applicable in the Republic of Bulgaria, is governed by accounting standard 19 (AS 19) “Staff income”. For the purposes of AS 19 “employees” means all persons who work (provide employment or official service) in the enterprise, as well as the persons who work under management and supervision contracts, service agreements and other contracts.
For the purposes of proper accounting of different economic operations related to employee benefits under employment agreements, AS 19 gives definition of employee benefits. Employee benefits are determined as forms of remuneration paid by the enterprise to the employees in return of their work. The standard sets out different types of employees’ remunerations (benefits): short-term benefits; termination benefits; equity compensation benefits; other long-term benefits; post-employment benefits (termination of employment or official relationships).
The standard defines the methodology for accounting and disclosing of expenses that enterprises incur with regard to the employee benefits. The enterprise is required to recognize obligations (liability) to the employees, where they have provided services in return of benefits payable in future. At the same time, the enterprise should recognize employee benefits when it consumes the economic benefit formed as a result of the employees’ work in return of their benefits.
The object of this publication refers to the employee benefits and remunerations, and its subject matter covers the remuneration of employees and their supervision. It is aimed at presenting key guidance for accounting of employer’s expenses for remunerations and of employee benefits.
On the basis of accounting information, one could optimize the methodology for analysis of the employer’s expenses for remunerations.