- US GAAP
ASC 712-10 notes the following:
The Compensation—Nonretirement Postemployment Benefits Topic provides guidance on nonretirement postemployment benefits, including termination benefits and other postemployment benefits provided to former and inactive employees.
An employer may provide benefits to employees in connection with their termination of employment. They may be either special termination benefits offered only for a short period of time or contractual termination benefits required by the terms of a plan only if a specified event, such as a plant closing, causes employees’ services to be terminated involuntarily. Termination benefits may take various forms including lump-sum payments, periodic future payments, or both. They may be paid directly from an employer’s assets, an existing pension plan, a new employee benefit plan, or a combination of those means.
Other postemployment benefits include, but are not limited to, the following:
- Salary continuation
- Supplemental unemployment benefits
- Severance benefits
- Disability-related benefits (including workers’ compensation)
- Job training and counseling
- Continuation of benefits such as health care benefits and life insurance coverage.
Generally, other postemployment benefits are part of the compensation provided to an employee in exchange for service.