What defines short-term employee benefits as per IAS 19?

Short-term employee benefits, as defined by IAS 19, are those that are expected to be settled within twelve months after the end of the reporting period in which the employees render their services. This category includes wages, salaries, paid annual leave, sick leave, profit-sharing, and bonuses, among other forms of remuneration.

The focus on a maximum settlement period of twelve months distinguishes these benefits from other types, such as post-employment benefits that extend beyond this timeframe. By limiting the definition to benefits expected to be paid within this period, IAS 19 ensures that these benefits are recognized and recorded in the same timeframe as the employee's service, making them easier to measure and account for in the financial statements. This treatment fosters clearer reporting and enhanced comparability across financial statements, as stakeholders can easily understand the immediate cost implications related to an entity’s employee benefits.

The other options do not align with the standard's specific definition: for instance, a settlement period of 24 months exceeds the threshold for classification as short-term, while nuances like employee tenure or category (full-time versus part-time) are not considered in the definition of short-term benefits under IAS 19.