When reviewing an actuarial valuation, one of the most closely examined figures is the movement in actuarial gains and losses. These movements, known as remeasurements under IAS 19, can vary significantly from one year to the next and may have a noticeable impact on a company’s financial position. For organisations with long-term employee benefit schemes, […]
In the ever-evolving landscape of financial reporting standards, staying abreast of the latest changes is essential for professionals in the insurance industry. One such significant development is the International Financial Reporting Standard 17 (IFRS 17), which brings about a fundamental shift in how insurance contracts are accounted for. For actuaries and insurance professionals, understanding IFRS […]
We are often asked questions about what is the “duration of liability” and how it impacts the discount rate use in the actuarial valuation of gratuity and leave encashment. We try to cover a few of these questions in this article. What is duration of liability? Duration of liability can be defined in more than […]
Actuarial valuation and reporting of a pension scheme under IAS 19 is significantly more complex than other employee benefit plans. Several issues, which after often ignored, need to be understood and allowed for when reporting for pension schemes.
During corporate transactions, such as mergers and acquisition, actuarial valuation of pension and other employee benefit schemes is often ignored. The parties involved in the transaction spend most of their time and focus on ‘tangible’ aspects of the balance sheet. They end up taking ‘shortcuts’ or proxy approaches with disastrous consequences for their shareholders. I […]
Indian Accounting Standard Ind AS 102 requires fair value methodology for ESOP valuation. This guide compares three methods – Black-Scholes, Binomial, and Monte Carlo – explaining when to use each approach and their key limitations for finance teams in India.
Topics such as risk-neutral probability and market-consistent valuation are at the heart of a Risk-Based Capital or an Economic Capital (EC) framework. Yet they continue to remain widely misunderstood. As the insurance regulations continue to evolve, it is important to get a proper grasp of some of these concepts. Here is a list of five […]