Actuarial valuation

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srikanth (Querist)
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29 July 2009 Dear all

What is actuarila loss or gain, when it will arise, will it hit profit and loss account..where we to show that amout..I hope u got.. pls help me on this

Abhishek Mohta

Abhishek Mohta (Expert)
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30 July 2009 Actuarial gains and losses may result from increases or decreases in either the present value of a defined benefit obligation or the fair value of any related plan assets. Causes of actuarial gains and losses include, for example:

(a) unexpectedly high or lowrates of employee turnover, early retirement or mortality or of increases in salaries, benefits (if the terms of a plan provide for inflationary benefit increases) or medical costs;

(b) the effect of changes in estimates of future employee turnover, early retirement or mortality or of increases in salaries, benefits (if the terms of a plan provide for inflationary benefit increases) or medical costs;

(c) the effect of changes in the discount rate; and

(d) differences between the actual return on plan assets and the expected return on plan assets.

Actuarial gains and losses should be recognised immediately in the statement of profit and loss as income or expense.