98
where the amount paid exceeds the amount of services rendered, the company recognizes the excess amount
as an asset (prepaid expense) only to the extent that the prepayment will lead to a reduction of future payments
or to reimbursement.
Post-employment benefits:
Post-employment benefits comprise pensions or other benefits (life insurance
and medical insurance) the company provides after retirement as an exchange for the employees’ service with
the company. Thus, such benefits include defined contribution schemes as well as defined benefits schemes.
The accrued cost of defined contribution schemes is booked as an expense in the period it refers to.
• Defined contribution scheme
According to the defined contributions scheme, the (legal or implied) obligation of the company is limited
to the amount that it has been agreed that it will contribute to the entity (i.e. pension fund) that manages
the contributions and provides the benefits. Thus the amount of benefits the employee will receive
depends on the amount the company will pay (or even the employee) and from the paid investments of
such contributions.
The payable contribution from the company to a defined contribution scheme, is either recognized as a
liability after the deduction of the paid contribution, or as an expense.
• Defined benefits scheme
The liability that is reported in the balance sheet with respect to this scheme is the present value of the
liability for the defined benefit less the fair value of the scheme’s assets (if there are such) and the changes
that arise from any actuarial profit or loss and the service cost. The commitment of the defined benefit is
calculated annually by an independent actuary with the use of the projected unit credit method. The yield
of long-term Greek Government Bonds is used as a discount rate.
The actuarial profit and losses are liability items for the company’s benefits and for the expense that will
be recognized in the results. Such that emerge from adjustments based on historical data and are over
or under the 10% margin of the accumulated liability, are booked in the results in the expected average
service time of the scheme’s participants. The cost for the service time is directly recognized in the results
except for the case where the scheme’s changes depend on the employees’ remaining service with the
company. In such a case the service cost is booked in the results using the straight line method within the
maturity period.
Benefits for employment termination: Termination benefits are payable when employment is terminated before
the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these
benefits. The Group books these benefits when it is committed, either when it terminates the employment of
existing employees according to a detailed formal plan for which there is no withdrawal possibility, or when it
provides such benefits as an incentive for voluntary redundancy. When such benefits are deemed payable in
periods that exceed twelve months from the Balance Sheet date, then they must be discounted based on the
yields of investment grade corporate or government bonds.
In the case of an offer that is made to encourage voluntary redundancy, the valuation of benefits for employment
termination must be based on the number of employees that are expected to accept the offer.
In case of an employment termination where there is inability to assess the number of employees to use such
benefits, a disclosure for a contingent liability is made but no accounting treatment is followed.
