Accounting for termination indemnities;

              829010 - Product Number
Issues Papers 1978
INTERNATIONAL PRACTICE TECHNICAL STANDARDS SUBCOMMITTEE ACCOUNTING FOR TERMINATION INDEMNITIES
Introduction
1. Termination indemnities (also called termination allow-ances, severance indemnities, or related terms) are amounts payable to employees on termination of their employment. Pay-ment of termination indemnities may be required by law, re-quired by contract, or made as a matter of custom. Termination indemnities are an important feature of social legislation in many countries, and the circumstances determining both the right to payment and the amount of payment vary from country
to country.
Scope of this Statement
2. This statement is intended to provide guidance on accounting for termination indemnity plans by enterprises that present finan-cial statements prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"). The enterprises most commonly affected include:
• U.S. enterprises with branch operations in foreign countries,
• U.S. enterprises consolidating or combining foreign affiliates or accounting for foreign investments under the equity method, and
• Foreign enterprises reporting in conformity with U.S. GAAP.