Ind AS 119: Employee Benefits#
Note: Ind AS 118 and 119 both deal with employee benefits. In Indian context, the standard is largely aligned with IAS 19.
Defined Benefit Obligations#
Components of Defined Benefit Cost#
1. Current Service Cost
- Increase in present value due to employee service
- Recognized in profit or loss
2. Past Service Cost
- Changes in benefit formula
- Recognized in profit or loss
- Straight-lined over vesting period
3. Net Interest Expense
- Net defined benefit liability × discount rate
- Recognized in profit or loss
4. Remeasurements
- Actuarial gains and losses
- Return on plan assets
- Change in effect of asset ceiling
- Recognized in OCI
Actuarial Valuation#
Key Assumptions:#
- Discount rate
- Salary escalation
- Mortality rate
- Withdrawal rate
- Expected return on assets
Sensitivity Analysis#
- Required for each significant assumption
- Show effect on DBO
- Disclose methods and assumptions
Termination Benefits#
Recognition#
- Recognize at earlier of:
- When entity can no longer withdraw offer
- When entity recognizes restructuring costs
Measurement#
- At fair value of termination benefits
- If payable after 12 months, discount
Disclosure Requirements#
- Reconciliation of opening/closing DBO
- Plan assets at fair value
- Principal actuarial assumptions
- Sensitivity analysis
- Expected contributions next year