We calculate your employee benefit provision under IAS 19, UGB and VRV 2015

Under § 198(8)(4) UGB, provisions must be made in particular for “expectancies of severance payments” and for “jubilee payments”. They are “to be recognised at the amount resulting from actuarial principles”; the amount “may also be determined by a financial-mathematical calculation, unless there are significant concerns against this in the individual case” (AFRAC 27, paras. 52 and 70, on § 211(1) UGB). States and municipalities measure provisions for severance payments and jubilees “using the Anwartschaftsbarwertverfahren” (§ 28(2) VRV 2015). In consolidated financial statements under IFRS (§ 245a UGB), IAS 19 Employee Benefits applies.

Quotations from Austrian sources are our translation; IAS 19 is quoted from its official English text.

We offer

• Calculation of the provision under IAS 19, UGB and VRV 2015 as a service

If you wish, our actuaries, certified by the National Bank of Slovakia, will provide:

• Calculation of the provision
• Advice on setting the actuarial assumptions
• Preparation of the necessary documentation
• Answers to all your questions

Employee benefits for which a provision is made

• Severance pay (Abfertigung) on retirement
• Severance pay (Abfertigung) on a pension for reduced capacity to work
• Jubilee payments (Jubiläumsgeld)

Abfertigung alt

Statutory grounds for the obligation exist for employees whose employment began before 1 January 2003 (“Abfertigung alt”), among others in these cases (AFRAC 27, explanatory notes on para. 57):

• the company terminates the employment after an uninterrupted period of three years, and the employee is not at fault for a premature dismissal or for the termination; likewise in the case of a justified premature resignation;
• the employee gives notice after at least ten years on reaching the statutory pension age or on taking the early old-age pension for long insurance periods;
• the employee dies: the legal heirs whom the employee was obliged to support receive half of the severance pay.

Under § 23(1) AngG, the severance pay amounts to twice the remuneration for the last month and rises with years of service up to twelve times after 25 years of service. Under the Workers’ Severance Pay Act (Arbeiter-Abfertigungsgesetz), §§ 23 and 23a AngG apply to the severance pay (§ 2(1)). For “Abfertigung Neu”, with the company’s statutory contribution, no provision is recognised (AFRAC 27, explanatory notes on para. 7); the contribution is 1.53 % of the monthly remuneration and of any special payments (§ 6(1) BMSVG). More in the guide Severance pay provision (Abfertigungsrückstellung).

Jubilee payments (Jubiläumsgeld)

The amount of the jubilee payments follows from the respective legal basis, “e.g. works agreements, collective agreements or special statutory rules” (AFRAC 27, para. 75). Two collective agreements as examples:

More in the guide Jubilee payment provision (Jubiläumsgeldrückstellung).

States and municipalities: VRV 2015

The VRV 2015 applies to “states and municipalities … and their economic undertakings, operations and operation-like institutions, in each case without their own legal personality” (§ 1(1)), “at the latest for the financial year 2020” (§ 40(2)). Provisions for severance payments and for jubilee payments are in any case long-term provisions (§ 28(4)). They are measured using the Anwartschaftsbarwertverfahren with the UDRB or the 7-year average rate of the Deutsche Bundesbank for a remaining term of 15 years, in each case at the closing date of the financial statements (§ 28(2) and § 19(5)). More in the guide Personnel provisions in states and municipalities; the published rates are on the page Rechnungszinssatz (in German).

IAS 19 in consolidated financial statements

A parent company that is required to do so by Art. 4 of Regulation (EC) No 1606/2002 prepares its consolidated financial statements under the adopted international accounting standards; another parent company “may” do so (§ 245a(1) and (2) UGB). Art. 4 covers companies whose securities, at their balance sheet date, are admitted to trading on a regulated market of any member state. IAS 19 “shall be applied by an employer in accounting for all employee benefits”, except share-based payment under IFRS 2 (paragraph 2). More in the guide IAS 19 in Austria.

References

• ALAS SLOVAKIA, s.r.o.
• Národná banka Slovenska
• Branson Ultrasonics, a.s.
• CEMMAC a.s.
• Continental Matador Rubber, s.r.o.

Contact

If you have any questions, please contact us.

E-mail:
info@ias19.at

Address:
Augustus Consulting, s.r.o.
Exnárova 8
821 03 Bratislava
Slovakia

Sources

• Austrian Commercial Code (Unternehmensgesetzbuch, UGB), § 198, § 211 and § 245a (RIS, in German, current version)
• AFRAC statement 27 Personalrückstellungen (UGB), June 2022, paras. 7, 52, 57, 70 and 75 with explanatory notes (in German)
• Salaried Employees Act (Angestelltengesetz, AngG), § 23 (RIS, in German); Workers’ Severance Pay Act (Arbeiter-Abfertigungsgesetz), § 2 (RIS, in German)
• Company Employee and Self-Employed Provision Act (BMSVG), § 6 (RIS, in German)
• Collective agreement for salaried employees and apprentices in commerce, 1 January 2026, section H (WKO, PDF, in German); Collective agreement for the metal technology industry, salaried employees, valid from 1 November 2025, § 19c (WKO, in German)
• Budget and Accounts Regulation 2015 (Voranschlags- und Rechnungsabschlussverordnung 2015, VRV 2015), § 1, § 19, § 28 and § 40 (RIS, in German, current version)
• Regulation (EC) No 1606/2002 on the application of international accounting standards, Art. 4, and IAS 19 Employee Benefits in Commission Regulation (EU) 2023/1803, paragraph 2 (EUR-Lex)