Provisions for liabilities
Example of calculation of provision for retirement bonus provision
Important:
All courses
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Next -
provision (R) for employee retirement bonus =>
, where:
S - current seniority at work
N - overall number of years of work (depending on the age and the retirement age)
Z - discounted base for retirement bonus
P - probability of staying employed at the company until retirement
Important:
- there are various methods to estimate such provisions,
- the most precise methods make the provision subject to the number of years with the company and not only on total years of work,
- due to the problems to calculate provisions for pension benefits or jubilee awards, it is recommended to retain an actuarial company or use specialist expert tools.
