Fozzie Ltd has for the past five years paid $7,5\%$ of its net profit as a bonus. The bonus is divided amongst all the employees of the entity at year$-$end. Fozzie Ltd has a $31$ December year$-$end.

$(10)$

Net profit at $31$ December $2023$

R$2500000$

$$ The Independent Institute of Education $($Pty$)$ Ltd $2024$

Page $6$ of $8$

$24$

$2024$

Required:

Shares in profits or any bonuses given to employees for services rendered constitute employee benefits in terms of IAS $19$ Employee Benefits.

Considering the above statement and the provisions of IAS $19,$ discuss whether based on the above scenario the cost of the bonus should be recognised at $31$ December $2023$