Acturial valiuation

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This query is : Resolved

BHASKAR AUDDY (Querist)

15 October 2011 While carrying out a Limited Review for the quarter ended Sept'11 of a public limited company, we have noticed the following:
On the yearly closing for March i.e. accounts prepared under Schedule VI of the Companies Act, the company account for the liabilities of gratuity and leave encashment on the basis of acturaial valuation carried out.
On the quarterly accounts, the company is providing these two liabilities, on the basis expenditure debited to the Profit & Loss Account during the previuos year. The figures is being extrapolated for the quarterly results.

Is this procedure acceptable under AS 15 while preparing the financials on the quarterly basis?

Or they need to carry out the Acturial Valuation as at 31st March for the year the quarterly financials is being drawn up and the figures will be cahrged based on the time proportion basis?

CA Neha Jain

CA Neha Jain (Expert)

21 October 2011 The preperation of quarterly financial statements is governed by AS 25 - Interim Financial Reporting.

Provisions in respect of gratuity and other defined benefit schemes for
an interim period are calculated on a year-to-date basis by using the
actuarially determined rates at the end of the prior financial year, adjusted
for significant market fluctuations since that time and for significant
curtailments, settlements, or other significant one-time events.

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