Spreadsheets

Bespoke spreadsheets

Spreadsheets made to individual client orders cover areas including:

• provisions for long-service (jubilee) awards,
• depreciation under IAS/IFRS,
• budgeting and variance analysis,
• multi-level and multi-segment cost accounting,
• costing of products and services,
• financial analysis of financial statements.

The standard spreadsheet: provisions for retirement severance payments

Our standard offer includes a spreadsheet for determining the value of provisions for retirement severance payments. Its author is Dr Jacek Kalinowski. The calculation model has been tested in practice many times and favourably assessed, among others, by statutory auditors examining financial statements in which the values calculated this way were used. Its main assumptions have also been published in accounting journals and in the press (e.g. Rzeczpospolita, Dobra Firma, 29 April 2004, No. 101).

Because it is built in Excel, once the individual calculation stages have been set up, the spreadsheet can be reused any number of times in subsequent financial years. Determining the value of provisions for employee benefits becomes a quick and easy task.

Do the provisions have to be calculated?

Recognising provisions for employee benefits is an obligation of every business. The only exception applies where the value of the provision is immaterial. To establish that, however, you must calculate the amount of the future obligations and disclose the figures in the notes to the financial statements — you cannot make statements about values that are not known.

How to do it?

The measurement and recording of employee benefit costs is complex. In practice, the greatest difficulty lies in reliably estimating the amount of the provision and its impact on the financial result — especially for provisions for retirement severance payments, the most common component of long-term employee benefits. This work can be entrusted to actuaries, but that involves significant cost. Giving up on determining the value of future obligations would contradict the fundamental principles of accounting and could lead to an unreliable presentation of the company's assets and financial position. In such situations, the ability to estimate the provision yourself using Excel — the IT tool most popular among accountants — proves invaluable. In many cases, a valuation carried out this way differs little from a professional actuarial valuation.

Articles on employee benefits (in Polish)

If you have any further questions, please contact us — finansus@finansus.pl.