IND AS19 - A Brief Overview

Presentation onIND AS 19BY N. SRINIVASANCONSULTING ACTUARY

© ARMSTRONG INTERNATIONAL CONSULTANTSE-MAIL: [email protected]: 9363200885 / 9869433317

Purpose

• As per Notification of MCA date 16th February 2015, MCA have given roadmap for applicability of Ind AS 19 to various companies.

• These standards are prepared in line with International Financial Reporting Standards (IFRS).

• This increase the transparency and comparability in financial statements of various companies.

• In a nutshell, IND AS Schemes are modified versions of IFRS/IAS with some changes to suit the Indian Economic Scenarios.

© ARMSTRONG INTERNATIONAL CONSULTANTS

Applicability

• A net worth based road map for the phased implementation of IND AS 19 has been announced by the Ministry of Corporate Affairs (MCA), for the following class of companies:o Listed Companies with Net worth exceeding than 500 Croreso Unlisted Companies with Net worth more than 250 Crores

• Adoption of IND AS 19 is mandatory from 01-04-2016.

• Applicability for apply to holding, subsidiary, joint venture or associate companies also


IND AS 19 Not Applicable To

• These companies are not required to be complaint with IND AS 19, o Securities listed companieso Companies in the process of being listed as Small &

Medium Sized Companies (SME)


Exemptions

• Following companies shall not be required to apply IND AS for preparation for financial statements either voluntarily or mandatorily:o Insurance Companieso Banking Companieso Non-banking Finance Companies

• Companies to which Ind AS is not applicable should follow Accounting Standards specified in Annexure to “Companies (Accounting Standards) Rules”, 2006.


Disclosures under Ind AS 19

Characteristics of Plan and associated risks

Three kinds of disclosures

Explain amounts arising in financial statements

Amount, timing and uncertainty of future cash flows








Characteristics of Plan and Associated Risks

• Entities are required to disclose information about detailed benefits plan including– The nature of the benefits provided by the plan.– A description of the regulatory framework in which the

plan operates, and any effect of the regulatory framework on plan.

– A description of any other entity’s responsibilities for the governance of the plan.

• Shall also disclose a description of the risks exposed to the entity by the plan (including un-usual entity specific or plan specific risks)


Methodology

• Benefits under the plan are attributed to years of service, taking into consideration – Future salary increase and– The plan’s benefit allocation formula.

• Benefit obligation is the total present value of the individual’s attributed benefits for valuation purposes at the measurement date.

• Service cost is the total present value of the individual’s benefits attributable to service during the year


Thank You


Economy & Finance

IND AS19 - A Brief Overview