Accounting Standard 15 Employee Benefits deals with all the forms of employee benefits, all forms of consideration given by an enterprise in exchange for service rendered by employees but exclude inventory compensation.
AS 15 is applicable for enterprise, Entities having 50 or more employees.
As 15 an employee is a person rendering service to an enterprise on full-time and part time and permanent and casual or temporary employees including whole time director and other management person also.
Short Term Employee Benefits –
* Wages, salaries and social security contributions
* Short Term paid absences such as paid annual leave where such absence are expected to take place within 12 months after the end of the period during which the employees provide related employees service,
* Profit Sharing and Bonus payable within 12 months after the end of the service,
* Non Monetary Benefits including medical care, housing, cars and fee goods or service for current employees
Post Employment Benefits
* Retirement Benefits- Pension and Gratuity
* Other Benefits – Post employment life insurance and post employment medical care,
* The amount of contributions made by such an enterprise as well as the employee towards this post employment benefits plan or the insurance company
* Investment returns earned on such contributions
Furthermore there can be cases where contribution made to the Defined Contribution Plan do not become due wholly within 12 months after the end of the period after which the employees provide related service.
The amount to be recognized as a defined benefit liability in the balance sheet should be the net total of the following amounts:
* Present value of the defined benefit obligation at the balance sheet date,
* Subtract any past service cost not yet recognized
* Subtract any fair value at the balance sheet date of plan assets,
Profit and Loss:
* Current service cost,
* Interest cost,
* Expected return on any plan assets,
* Actuarial gains and losses,
* Past service cost to the extent the accounting standard requires an enterprise to recognize it,
Other Long Term Employee Benefits –
Other long term benefits are nothing but the employee benefits that do not become due within 12 months subsequent to the end of the period,
* Long term compensated absences such as long service or sabbatical leave,
* Jubilee such as long service benefits,
* Long term disability benefits,
* Profit Sharing and bonus if payable after 12 months
Measurement:Discounted value of the obligation fair value of plan assets
* Plan assets
(a) assets held by a long term employee benefits fund and
(b) qualifying insurance policies,
TERMINATION BENEFITS
Termination benefits are employee benefits payable as a result of either
(a) an enterprises decision to terminate an employee employment before the normal retirement date,or
(b) an employees decision to accept voluntary redundancy in exchange for those benefits-Voluntary retirement
Recognition criteria:
(a) Present obligation as a result of past events.
(b) Probable that there is outflow of resources embodying economic benefits will required to settle the obligation.
(c) Reliable estimate of the obligation can made.
DEFINED CONTRIBUTION PLAN
(a) Fixed Contribution to be paid by employer
(b) Actuarial and Investment risk borne by employee
(c) Discounted value of benefits to be recognized, if paid after 12 months
Examples- PF, ESI, post employment life insurance and its interest
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In case of any requirement related to Actuarial Valuations in Compliance of AS 15 (Revised 2005) IndAS 19 or In case of more details in the above matter you may contact me at 9716647377 or email [email protected]
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