Accounting & Disclosure for Employee Benefits in Compliance of
Accounting Standard (AS) 15 (revised 2005)
Accounting Standard (AS) 15 (revised 2005) is issued by the Institute of Chartered Accountants of India and is mandatory in nature (refer to the text of the standard for details).
The objective of the standard is to prescribe accounting and disclosure for employee benefits. The statement requires an enterprise to recognize:-
A liability when an employee has provided service in exchange for employee benefits to be paid in the future; and
An expense when the enterprise consumes the economic benefit arising from service provided by an employee in exchange for employee benefits.
Employee Benefits fall under 2 type of plans:- Defined Contribution Plans and Defined Benefit Plans.
Employee Benefits are further classified as:-
Short Term Employee Benefits
Post Employment Benefits such as Gratuity, Pension, Other Retirement Benefits, Post-Employment Life Insurance and Post-Employment Medical Care;
Other Long-Term Employee Benefits, including long-service leave or sabbatical leave, jubilee or other long-service benefits, long-term disability benefits and, if they are not payable wholly within twelve months after the end of the period, profit-sharing, bonuses and deferred compensation; and
Because each category identified above has different characteristics, this statement establishes separate requirements for each category.
Broadly Employee Benefits fall into following categories :
Defined Contribution Benefits &
Defined benefit benefits:- Defined benefit benefits are other than defined contribution Benefits. ﴾Refer to Definitions-Paragraph 7 of AS-15 (Revised). ﴿
Accounting and Disclosure requirements for Defined Benefits need the skill of an Actuary.
Most common Defined Benefits relevant in the Indian context which need the services of an actuary for compliance of the accounting standard, whilst finalizing the financial statements are:-
Compensated Absences (Earned Leave)
Compensated Absences (Sick Leave)
Post Retirement Medical Benefits
Superannuation (Pension Benefits), Etc.
Frequent items to be conversant with the subject are:-
Projected Unit Credit Method (PUC)
Present Value of Obligation
Current Service Cost
Experience Adjustment on Plan Liabilities
Experience Adjustment on Plan Assets
Current & Non-Current Liabilities
We provide actuarial services for compliance of the standards :-
AS-15 (Revised 2005)
Ind AS – 19
We have expertise, experience and in-depth knowledge in this field. We have a large clientele spread in almost all sectors of the economy in Public and Private Sectors including Multinational Companies, Limited Companies, Schools, Hospitals, Banks, Electricity/Power Companies etc. etc.
All assignments undertaken by us are subject to terms & conditions.
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