Answer-The Projected Unit Credit (PUC) Method is used in actuarial valuation of defined benefit pension obl...

AS 15 Revised 2005 Employee Benefits mandates the use of the Projected Unit Credit PUC Method for measuring the obligation under defined benefit plans such as gratuity, pension, and post-employment medical benefits. The PUC method treats each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately projecting future salary levels, discount rates, and demographic assumptions to determine the present value of the defined benefit obligation. This actuarial method is also required under IAS 19 the international standard and Ind AS 19. AS 15 requires an independent actuarial valuation at each balance sheet date.

Question

The Projected Unit Credit (PU

C Method is used in actuarial valuation of defined benefit pension obligations. Which accounting standard in India mandates its use for valuing employee benefit obligations such as gratuity and pension?

A AS 15 (Revised 2005) — Employee Benefits

B AS 2 — Valuation of Inventories

C AS 11 — Foreign Exchange Effects

D AS 22 — Accounting for Taxes on Income

E AS 19 — Leases

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