Employee Benefit Liabilities, Net

12 Months Ended

Dec. 31, 2021

Disclosure of information about defined benefit plans [abstract]

EMPLOYEE BENEFIT LIABILITIES, NET

Note 18: - Employee Benefit Liabilities, NET

Employee benefits consist of short-term benefits and post-employment benefits.

Post-employment benefits:

According to the labor laws and Severance Pay Law in Israel, the Company is required to pay compensation to an employee upon dismissal or retirement or to make current contributions in defined contribution plans pursuant to Section 14 of the Severance Pay Law, as specified below. The Company’s liability is accounted for as a post-employment benefit only for employees not under Section 14. The computation of the Company’s employee benefit liability is made in accordance with a valid employment contract or a collective bargaining agreement based on the employee’s salary and employment terms which establish the entitlement to receive the compensation.

The post-employment employee benefits are normally financed by contributions classified as defined benefit plans, as detailed below:

1. Defined contribution deposit:

The Company’s agreements with part of its employees are in accordance with section 14 of the Israeli Severance Pay Law. Contributions made by the Company in accordance with Section 14 release the Company from any future severance liabilities in respect of those employees. The expenses for the defined benefit deposit in 2021, 2020 and 2019 were $1,023 thousands, $1,299 thousands and $1,102 thousands, respectively.

2. Defined benefit plans:

The Company accounts for the payment of compensation as a defined benefit plan for which an employee benefit liability is recognized and for which the Company deposits amounts in a long-term employee benefit fund and in qualifying insurance policies.

3. Expenses recognized in comprehensive income (loss):

	Year Ended December 31,
	2021		2020		2019
	U.S. Dollars in thousands
Current service cost	$	281	$	264	$	282
Past service cost(1)		415
Interest expenses, net		23		23		23
Total employee benefit expenses		716		287		305
Actual return on plan assets	$	349	$	35	$	158

(1) During 2021 the Company paid employees an increased compensation due to downsizing program.

The expenses are presented in the Statement of Comprehensive income (loss) as follows

	Year Ended December 31,
	2021		2020		2019
	U.S. Dollars in thousands
Cost of revenues	$	499	$	195	$	201
Research and development		90		45		62
Selling and marketing		62		22		16
General and administrative		65		25		26
	$	716	$	287	$	305

4. The plan liabilities, net:

	December 31,
	2021		2020
	U.S. Dollars in thousands
Defined benefit obligation	$	5,434	$	5,606
Fair value of plan assets		4,154		4,200
Total liabilities, net	$	1,280	$	1,406

5. Changes in the present value of defined benefit obligation

	2021			2020
	U.S. Dollars in thousands
Balance at January 1,	$	5,606		$	5,058
Interest costs		84			84
Current service cost		281			264
Past service cost		415			-
Benefits paid		(1,309	)		(102	)
Demographic assumptions		10	)		(3	)
Financial assumptions		33	)		(124	)
Past Experience		149			33
Currency Exchange		165			396
Balance at December 31,	$	5,434		$	5,606

6. Plan assets

a) Plan assets

Plan assets comprise assets held by long-term employee benefit funds and qualifying insurance policies.

b) Changes in the fair value of plan assets

	2021			2020
	U.S. Dollars in thousands
Balance at January 1,	$	4,200		$	3,789
Expected return		62			61
Contributions by employer		189			187
Benefits paid		(780	)		(102	)
Demographic assumptions		0			0
Financial assumptions		0			0
Past Experience		362			(29	)
Currency exchange		121			294
Balance at December 31,	$	4,154		$	4,200

7. The principal assumptions underlying the defined benefit plan

	2021		2020		2019
	%
Discount rate of the plan liability		3.1		1.8		2.8
Future salary increases		3.0		3.0		3.1

The sensitivity analyses below have been determined based on reasonably possible changes of the principal assumptions underlying the defined benefit plan as mentioned above, occurring at the end of the reporting period.

In the event that the discount rate would be one percent higher or lower, and all other assumptions were held constant, the defined benefit obligation would decrease by $266 thousands or increase by $310 thousands, respectively.

In the event that the expected salary growth would increase or decrease by one percent, and all other assumptions were held constant, the defined benefit obligation would increase by $294 thousands or decrease by $252 thousands, respectively.