Accouting of Group gratuity

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This query is : Resolved

jitesh (Querist)

13 August 2009
The Company is having a group gratuity scheme with LIC, where thay pay a premium at the beginning of the year. How the liability will be recognised as the balance sheet date ?

Try to give answer urgently

Venkat Rao Marella

Venkat Rao Marella (Expert)

13 August 2009 Jitesh,

It is advisable to get the valuation of the gratuity liability done by a qualified actuairy.

They will ask you for variuus details such as employees date of birth, date of joining, salary structure, leave policy, actual gratuity setteled by the cmopany during the year etc and will let u know the amount of liability you are required to provide as on the said date.

approach LIC for getting the acturial valuation done. LIC have their pannel of actuaries, who can help u out.

Venkat.

jitesh

jitesh (Querist)

14 August 2009 Hi Venkat,

As u r saying, the Company has the actuarial valuation report as per Project Unit Method but the normal format as per AS-15 & as given by LIC is different. What figure should i consider for recognition ?

Thanks

Venkat Rao Marella

Venkat Rao Marella (Expert)

14 August 2009 Jitesh,

I advise, u sit with the Actuary and ask them to redraft the report mentioning the same details which are to be diclosed in the Financial statements as per AS-15R.

They will give the valuation report as per AS-15R.

Venkat.

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