I am working in a company where only two employees there on its payroll and the company has made provisions for Leave Encashment and Gratuity as well as per its policy in case of Leave Encashment and and as per law prevailing in case of Gratuity. Our Auditors have raised queries that Acturial valuation should have been done. Can anybody let me know whether this is mandatory to have Acturial Valuation in these cases. Please guide. Thanks,
As per AS -15 Acturial valuation is mandatory if- the enterprises which fall in any one or more of the following categories, at any time during the accounting period: (i) Enterprises whose equity or debt securities are listed whether in India or outside India. (ii) Enterprises which are in the process of listing their equity or debt securities as evidenced by the board of directors’ resolution in this regard. (iii) Banks including co-operative banks. (iv) Financial institutions. (v) Enterprises carrying on insurance business. (vi) All commercial, industrial and business reporting enterprises, whose turnover for the immediately preceding accounting period on the basis of audited financial statements exceeds Rs. 50 crore. Turnover does not include ‘other income’. (vii) All commercial, industrial and business reporting enterprises having borrowings, including public deposits, in excess of Rs. 10 crore at any time during the accounting period. (viii) Holding and subsidiary enterprises of any one of the above at any time during the accounting period. (b) in its entirety, except the following, for enterprises which do not fall in any of the categories in (a) above and whose average number of persons employed during the year is 50 or more.
Accordingly, Check all the criteria and decide, i thinnk it will not be applicable.
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