Arun Kumar Aggarwal (Service) (65 Points)
26 February 2008Dear All,
AS -15(revised) re. disclosure of Peresent Value of Obligation regarding the retirement / future benefits to be paid to employees is applicable w.e.f. 01.04.2006,while most of the companies have not done the disclosure as per the revised AS 15 in their AR for 2006-07. Whether some relaxation has been granted?.
Now pls tell from which accounting year it is mandatory.
CA. Arun K. Aggarwal
ASHISH KUMAR TALAPATRA
(SALARIED)
(20 Points)
Replied 23 April 2008
Formula for Actuarial Valuation under AS - 15
Dear Mr. Arun,
The ICAI originally made AS-15 (Revised) mandatory for all accounting years commencing on or after April 1, 2006. Following the notification issued by NACAS (stated below), the ICAI has postponed the applicability of AS-15 (Revised) to accounting years commencing on or after December 7, 2006. This means for the accounting year 2006-07, old AS-15 still applies.
As per the provisions of the Companies Act, till NACAS notifies, all standards prescribed by the ICAI will be mandatory. Hence, for 2006-07, the standards issued by the ICAI will be mandatory . NACAS has not made any changes to the standards, but it has combined Level II and Level III enterprises into a single group.
This means all standards applicable to Level II enterprises will apply to Level III enterprises.
AS-15 (Revised) is more or less a verbatim reproduction of IAS 19. Under Indian situations PF/superannuation constitute `defined contributions', while gratuity and leave encashment are `defined benefit'. Measurement of these benefits under the old AS-15 and the revised AS-15 are not materially different, the only major change being disclosure.
Hence, all the companies should presume that AS-15 (Revised) as more or less mandatory, and start working towards that.
Thus, even though AS-15 (Revised) has been postponed to 2007-08, it is better to follow measurement principles enunciated for 2006-07 itself and make adequate provision/disclosure; on the principle of measurement there is no difference between the old and the revised AS-15.
The disclosure requirement under AS-15 (Revised) is very elaborate, and thankfully it has been postponed by a year. Hence, all companies should try to follow AS-15 (Revised) in spirit. It needs a close coordination with external agencies such as LIC. It is understood that LIC is prepared to help companies implement AS-15 (Revised) with necessary software support. The ICAI is also planning an FAQ to clear some of the doubts expressed. This one-year gap should be used to familiarise and implement the revised AS-15.
thanks & regards
Ankit Singhal
Asstt. Company Secretary
Jindal Drilling & industries Limited
9818416960
Murlee
(Professional)
(204 Points)
Replied 27 May 2008
(AS 15) should the provision or disclosure to be made even if we don not know the exact amount of such leave encashment to be paid in future ??? organisation is a big company having more than 200 employees.
Ca Jai Prakash Agarwal
(practice)
(683 Points)
Replied 27 November 2008
I am a ca and wanted to share the knowledge resources. my Mo No is 9219544415
Ca Jai Prakash Agarwal
(practice)
(683 Points)
Replied 27 November 2008
Hi,
This is JPA. Contact me at 9219544415
pranati prabhu
(service)
(27 Points)
Replied 18 September 2009
we are in the service industry with all employees outsourced thro a labour contractor. all short term employee benefits including pf and esic are reimb to the contractor on the basis of monthly bills raised by the contractor.
as regards post employment benefits such as gratuity, leave encashment on retirement, super annuation etc is primarily our liab vide agreement entered into with the outsourcing contractor. we have not done any actuarial valuation in respect of the said liab.
my query :
1) whether the provisions of as15(revised) are applicable to us?
2)if applicable whether it will attract qualification in the audit report for non-compliance.
3) if these facts are mentioned in the Notes to accounts, whether qualification in audit report can be avoided?
CAclubindia
