UNDERSTANDING SUBSTANCE OVER FORM

Both the IASB's Framework and IAS 1 Presentation of financial statements state that transactions and events should be accounted for and presented in accordance with their substance and economic reality, and not merely their legal form.

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DEFINED CONTRIBUTION VS DEFINED BENEFIT PLANS

A defined contribution plan is a pension plan whereby an employer pays fixed contributions into a separate fund and has no legal or constructive obligations to pay further contributions. Any actuarial and investment risks are assumed by the employee or third party. The employer is not required to make up for any shortfall in assets.

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