The Hindu Business Line : Actuaries to get guidance on valuation of staff benefits soon

What it means
Companies with over Rs 50 crore turnover in financial year 2005-06 would have to comply with revised AS-15 from April 1, 2006. This accounting standard stipulates certain categories of enterprises to do retirement benefit valuation through actuaries.

New Delhi , Aug. 8

Actuaries may soon get new guidance on various ticklish issues thrown up by the revised accounting standard on employee benefits (AS-15), which has become mandatory for large corporates from April 1 this year.

The Institute of Chartered Accountants of India (ICAI), which has formulated the revised AS-15, is in talks with the Actuarial Society of India (ASI) over the issue of evolving a new guidance note on actuarial reports under the revised AS-15.

Guidance note

The revised AS-15 has the distinction of bringing together the Chief Financial Officer , auditor and an actuary in the process of finalising the financial statements of companies.

"Actuarial Society had sent us the draft of the new guidance note seeking our comments. We have already forwarded our views. There will now be a meeting between the ICAI and the Actuarial society before the guidance note is finalised," Mr T.N. Manoharan, ICAI President, said at an Assocham seminar on `future of employee benefits in India: Implications for Corporate Profitability'.

Companies with over Rs 50 crore turnover in financial year 2005-06 would have to comply with revised AS-15 from April 1, 2006. This accounting standard stipulates certain categories of enterprises to do retirement benefit valuation through actuaries.

At the seminar, a Watson Wyatt report on `Ageing Workforce 2006' for India was released. Mr Bob Charles, Head-Benefits Practice (Asia-Pacific), Watson Wyatt Worldwide, said that business process outsourcing trend seen in the recent years is going to continue and that India, in terms of its demographic profile, has a huge comparative advantage as many of the older countries do not have the workforce they need.

The report noted that companies could no longer afford to view retirement and healthcare benefits provision as optional.

"As competition for global talent intensifies amongst companies, well-designed healthcare and retirement benefit schemes that take into account demographic changes will be more effective in ensuring long-term corporate profitability," the report highlighted.

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