## AS 15 Employee Benefits – Overview & Classification

AS 15 classifies all employee benefits into four categories:

#	Category	Key Feature
1	Short-term Employee Benefits	Payable within 12 months of the service period
2	Post-Employment Benefits	Paid after retirement / end of employment
3	Other Long-term Benefits	Paid after 12 months, but not a retirement benefit
4	Termination Benefits	Paid because of termination of employment

### Who is an "Employee"?

AS 15 does not define "employee" but states that employees may serve on a:

Full-time, part-time, permanent, casual, or temporary basis
Includes directors and other management personnel

### Core Principle

> Expense is recognized in the year it accrues — not when it is paid.

This accrual principle applies across all four categories, though the measurement basis varies.

⚠️ Common exam mistakes

Assuming directors are excluded from AS 15 – they are explicitly included
Confusing 'other long-term benefits' with 'post-employment benefits' – the distinction is whether the trigger is retirement (post-employment) or merely the passage of more than 12 months (other long-term)
Treating termination benefits as post-employment benefits – they arise from the event of termination, not retirement

Bare-Act text Para 7 – Definitions · AS 15 (Revised 2005) – ICAI · click to expand

Employee benefits are all forms of consideration given by an enterprise in exchange for service rendered by employees. Short-term employee benefits are employee benefits (other than termination benefits) which fall due wholly within twelve months after the end of the period in which the employees render the related service.

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AS 15 – Overview and Classification of Employee Benefits

⚠️ Common exam mistakes