Page 15 University of Technology, Jamaica Notes to the Financial Statements 31 March 2020 (expressed in Jamaican dollars unless otherwise indicated) 2. Summary of Significant Accounting Policies (Continued) (q) Employee benefits (i) Pension Plan The University operates a defined contribution plan. Once the contributions have been paid, the University has no further payment obligations. Contributions to the plan are charged to the statement of comprehensive income in the period to which they relate. Employee benefits that are earned as a result of past or current service are recognised in the following manner: Short-term employee benefits are recognised as a liability, net of payments made, and charged as an expense. The expected cost of vacation leave that accumulates is recognised when the employee becomes entitled to the leave. (ii) Medical Care The University also has a constructive obligation to provide certain post-employment medical benefits. The obligation to fund these future benefits is actuarially determined and accounted for as follows: The amount recognised in the statement of financial position in respect of post-employment medical benefits is the present value of the post-employment medical benefit obligation at the statement of financial position date. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the post-employment medical benefit obligation is determined by discounting the estimated future cash outflows using interest rates of highquality Government of Jamaica bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related medical liability. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise. Past-service costs are recognised immediately in the statement of comprehensive income determining net surplus. (r) Leases Accounting policies applied from 1 April 2019 The University acting as lessee, recognises a right-of-use asset and a lease liability for all leases with a term of more than 12 months. At the commencement date, lease liabilities are measured at an amount equal to the present value of the following lease payments for the underlying right-of-use assets during the lease term: • fixed payments (including in-substance fixed payments), less any lease incentives receivable; • variable lease payments that are based on an index or a rate; • amounts expected to be payable by the company under residual value guarantees. University of Technology, Jamaica 131
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