Surprised to see comments from various people - concept of gratuity valuation is widely misunderstood it seems. Actuarial valuations of gratuity, leave encashment, pension or other defined benefit schemes are mandatory as per AS 15 (revised, 2005) for following companies:
1. Listed companies
2. Banks/FIs/Insurance companies
3. Companies having turnover more than 50 crores
4. Companies having borrowings more than 10 crores
5. Companies employing more than 50 employees
Even companies which do not fall under any category above need to consult a certified actuary to assess materiality and need of any actuarial valuation.
Such valuations cannot be done by company officials or their auditors - this would account to violation of the accounting standard
From India, Bangalore
11. Listed companies
2. Banks/FIs/Insurance companies
3. Companies having turnover more than 50 crores
4. Companies having borrowings more than 10 crores
5. Companies employing more than 50 employees
Even companies which do not fall under any category above need to consult a certified actuary to assess materiality and need of any actuarial valuation.
Such valuations cannot be done by company officials or their auditors - this would account to violation of the accounting standard
From India, Bangalore
Thanks numerica.in;850235 for your update.
'AS 15' appears to be an Accounting Standard and most of HR Professionals like me are not aware of Accounting Standards. I believe all Chartered Accountants and Auditors must be well aware of provisions of 'AS 15' and compliance needed under it. Hopefully they are ensuring necessary compliance in companies they are associated with.
Anyway thanks for update.
Thanks & Regards
From India, Pune
'AS 15' appears to be an Accounting Standard and most of HR Professionals like me are not aware of Accounting Standards. I believe all Chartered Accountants and Auditors must be well aware of provisions of 'AS 15' and compliance needed under it. Hopefully they are ensuring necessary compliance in companies they are associated with.
Anyway thanks for update.
Thanks & Regards
From India, Pune
Dear All,
I have encountered with an issue for gratuity valuation:
As on 31st march 2010, as per actuarial valuation the prov. we have created in our B/s is for Rs. 198416. Also we have a Group Gratuity scheme with LIC, wherein as on 31st March 2010 already deposited amount is Rs. 998416.
Now for upto 31st August 2010, LIC is asking for an amount to be deposited with them is say Rs. 10 over and above what has already been deposited,which they say as Current Service Cost + Add. contribution for existing fund for the period 1st Aug 2009 to 31st Aug. 2010.
Now my question is how much amount we shud deposit with LIC so that no rules/law gets violated.
Again as per actuarial valuation if the company winds up or discontinue then the amount we have to pay to our employees by way of gratuity is Rs. 21 lac.
Pls. advise on the correct amount to be deposited with LIC to maintain the fund value, which can be used to pay off the gratuity to employee who leaves the service and who has completed 5 yrs. of service.
Thanks in advance
From India, Delhi
I have encountered with an issue for gratuity valuation:
As on 31st march 2010, as per actuarial valuation the prov. we have created in our B/s is for Rs. 198416. Also we have a Group Gratuity scheme with LIC, wherein as on 31st March 2010 already deposited amount is Rs. 998416.
Now for upto 31st August 2010, LIC is asking for an amount to be deposited with them is say Rs. 10 over and above what has already been deposited,which they say as Current Service Cost + Add. contribution for existing fund for the period 1st Aug 2009 to 31st Aug. 2010.
Now my question is how much amount we shud deposit with LIC so that no rules/law gets violated.
Again as per actuarial valuation if the company winds up or discontinue then the amount we have to pay to our employees by way of gratuity is Rs. 21 lac.
Pls. advise on the correct amount to be deposited with LIC to maintain the fund value, which can be used to pay off the gratuity to employee who leaves the service and who has completed 5 yrs. of service.
Thanks in advance
From India, Delhi
We are providing actuarial consultancy in the area of employee benefits wherein compliance of Accounting Standards of the Institutes of Chartered Accountants is applied. Most important institute, in the Indian context, is The Institute of Chartered Accountants of India. The relevant accounting standard applicable to accounting for employee benefits issued by The Institute of Chartered Accountant of India is Accounting Standard-15 (Revised 2005) and some of the important employee benefits involving actuarial treatment are :-
Gratuity
Leave Encashment
Pension
Post Retirement Medical Benefits
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2013, the services we deal in will be needed by you and we will be happy to provide our services if needed. For further details we request you to visit our website at <link no longer exists - removed>
Tikaram Chaudhary
9211637063
From India, Delhi
Gratuity
Leave Encashment
Pension
Post Retirement Medical Benefits
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2013, the services we deal in will be needed by you and we will be happy to provide our services if needed. For further details we request you to visit our website at <link no longer exists - removed>
Tikaram Chaudhary
9211637063
From India, Delhi
We are providing actuarial consultancy in the area of employee benefits wherein compliance of Accounting Standards of the Institutes of Chartered Accountants is applied. Most important institute, in the Indian context, is The Institute of Chartered Accountants of India. The relevant accounting standard applicable to accounting for employee benefits issued by The Institute of Chartered Accountant of India is Accounting Standard-15 (Revised 2005) and some of the important employee benefits involving actuarial treatment are :-
Gratuity
Leave Encashment
Pension
Post Retirement Medical Benefits
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2013, the services we deal in will be needed by you and we will be happy to provide our services if needed. For further details we request you to visit our website at <link no longer exists - removed>
Tikaram Chaudhary
9211637063
From India, Delhi
Gratuity
Leave Encashment
Pension
Post Retirement Medical Benefits
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2013, the services we deal in will be needed by you and we will be happy to provide our services if needed. For further details we request you to visit our website at <link no longer exists - removed>
Tikaram Chaudhary
9211637063
From India, Delhi
We are providing actuarial consultancy in the area of employee benefits wherein compliance of Accounting Standards of the Institutes of Chartered Accountants is applied. Most important institute, in the Indian context, is The Institute of Chartered Accountants of India. The relevant accounting standard applicable to accounting for employee benefits issued by The Institute of Chartered Accountant of India is Accounting Standard-15 (Revised 2005) and some of the important employee benefits involving actuarial treatment are :-
Gratuity
Leave Encashment
Pension
Post Retirement Medical Benefits
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2013, the services we deal in will be needed by you and we will be happy to provide our services if needed. For further details we request you to visit our website at <link no longer exists - removed>
Tikaram Chaudhary
9211637063
From India, Delhi
Gratuity
Leave Encashment
Pension
Post Retirement Medical Benefits
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2013, the services we deal in will be needed by you and we will be happy to provide our services if needed. For further details we request you to visit our website at <link no longer exists - removed>
Tikaram Chaudhary
9211637063
From India, Delhi
We are providing actuarial consultancy in the area of employee benefits wherein compliance of Accounting Standards of the Institutes of Chartered Accountants is applied. Most important institute, in the Indian context, is The Institute of Chartered Accountants of India. The relevant accounting standard applicable to accounting for employee benefits issued by The Institute of Chartered Accountant of India is Accounting Standard-15 (Revised 2005) and some of the important employee benefits involving actuarial treatment are :-
Gratuity
Leave Encashment
Pension
Post Retirement Medical Benefits
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2013, the services we deal in will be needed by you and we will be happy to provide our services if needed. For further details we request you to visit our website at <link no longer exists - removed>
Tikaram Chaudhary
9211637063
From India, Delhi
Gratuity
Leave Encashment
Pension
Post Retirement Medical Benefits
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2013, the services we deal in will be needed by you and we will be happy to provide our services if needed. For further details we request you to visit our website at <link no longer exists - removed>
Tikaram Chaudhary
9211637063
From India, Delhi
We are providing actuarial consultancy in the area of employee benefits wherein compliance of Accounting Standards of the Institutes of Chartered Accountants is applied. Most important institute, in the Indian context, is The Institute of Chartered Accountants of India. The relevant accounting standard applicable to accounting for employee benefits issued by The Institute of Chartered Accountant of India is Accounting Standard-15 (Revised 2005) and some of the important employee benefits involving actuarial treatment are :-
Gratuity
Leave Encashment
Pension
Post Retirement Medical Benefits
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2013, the services we deal in will be needed by you and we will be happy to provide our services if needed. For further details we request you to visit our website at <link no longer exists - removed>
Tikaram Chaudhary
9211637063
From India, Delhi
Gratuity
Leave Encashment
Pension
Post Retirement Medical Benefits
Since annual financial statements such as Balance Sheet and Profit/ Loss Statement of your clients are at hand for the close of the financial year as on 31.03.2013, the services we deal in will be needed by you and we will be happy to provide our services if needed. For further details we request you to visit our website at <link no longer exists - removed>
Tikaram Chaudhary
9211637063
From India, Delhi
Hi Smitha,
As you are aware Section 211 of the Companies Act 1956 was amended to Companies (Amendment) Act 1999 requires that every Profit and Loss Account and Balance sheet of the Company shall comply with the Accounting Standard which is recommended by the Institute of Chartered Accountants of India. Accounting Standard 15(AS 15) was prescribed by the Institute of Chartered Accountants of India. for Valuation of Gratuity and other employee related liabilities.
The above AS 15 was revised by the Institute of Chartered Accountant in 2005 making it much more elaborate. Moreover, this has been made mandatory for the following organizations from the accounting year commencing after 7th December 2006:
All listed Companies.
All Banks, Financial Institutions, Insurance Companies.
All Business Organizations whose turnover exceeds Rs.50 Crores.
Or
Are having borrowing including public deposits in excess of Rs.10 Crores at any time during the year.
Or
Are employing 50 or more persons.
So its mandatory and really very important to get valuation done from a certified Actuary,
We have a branch office in Bangalore.. Kindly contact me on +91-9916086228 for price and more details..
Regards,
Manjunath Gupta
From India, Bangalore
As you are aware Section 211 of the Companies Act 1956 was amended to Companies (Amendment) Act 1999 requires that every Profit and Loss Account and Balance sheet of the Company shall comply with the Accounting Standard which is recommended by the Institute of Chartered Accountants of India. Accounting Standard 15(AS 15) was prescribed by the Institute of Chartered Accountants of India. for Valuation of Gratuity and other employee related liabilities.
The above AS 15 was revised by the Institute of Chartered Accountant in 2005 making it much more elaborate. Moreover, this has been made mandatory for the following organizations from the accounting year commencing after 7th December 2006:
All listed Companies.
All Banks, Financial Institutions, Insurance Companies.
All Business Organizations whose turnover exceeds Rs.50 Crores.
Or
Are having borrowing including public deposits in excess of Rs.10 Crores at any time during the year.
Or
Are employing 50 or more persons.
So its mandatory and really very important to get valuation done from a certified Actuary,
We have a branch office in Bangalore.. Kindly contact me on +91-9916086228 for price and more details..
Regards,
Manjunath Gupta
From India, Bangalore
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Gratuity Valuation knowledge.pdf