If your company prepares financial statements in India, you will encounter one of two accounting standards governing employee benefit valuations: AS 15 (Revised 2005) or Ind AS 19. Knowing which applies to your company is the essential first step before engaging an actuary — and understanding the differences helps you interpret the valuation report and manage the P&L impact.
Which Standard Applies to Your Company?
| Company Type | Applicable Standard |
|---|---|
| Listed companies (any exchange) | Ind AS 19 |
| Unlisted companies with net worth ≥ ₹250 crore | Ind AS 19 |
| Subsidiaries / associates / JVs of Ind AS companies | Ind AS 19 |
| Companies with overseas listing | Ind AS 19 / IAS 19 |
| Unlisted, net worth < ₹250 crore (not Ind AS) | AS 15 (Revised 2005) |
| Banks and insurance companies (unless Ind AS notified) | AS 15 currently |
If you are uncertain which standard applies, consult your statutory auditor — they will confirm based on your company's size, listing status, and group structure.
Key Differences at a Glance
| Feature | AS 15 (Revised 2005) | Ind AS 19 |
|---|---|---|
| Actuarial gains/losses recognition | Corridor method permitted, or full P&L | Immediately in OCI — never recycled |
| Past service cost | Unvested portion - Amortised over average vesting period (Vested is recognized immediately) | Recognised immediately in P&L |
| Net interest cost presentation | Not separately required | Mandatory — on net DBO/plan asset |
| Sensitivity disclosures | Not required | Mandatory (±50 bps on key assumptions) |
| Expected maturity profile | Not required | Required — undiscounted benefit payments |
| Disclosure depth | Moderate | Extensive — full movement table, assumptions, sensitivities |
The Most Important Difference: OCI Treatment
This is the change that most often surprises finance teams when they transition from AS 15 to Ind AS 19.
Under AS 15, actuarial gains and losses — which arise from changes in assumptions (discount rate, salary escalation, mortality) or differences between actual and expected experience — must be recognised immediately in profit and loss.
Under Ind AS 19, all remeasurements (actuarial gains/losses on the DBO, return on plan assets excluding interest) are recognised immediately in Other Comprehensive Income (OCI) and are never recycled to P&L. This means:
- P&L shows only current service cost and net interest cost — relatively smooth year-to-year
- OCI shows all volatility from assumption changes and experience variances
- The balance sheet DBO always reflects the full actuarial liability — no deferred gains/losses
- Total comprehensive income captures the full economic cost
Past Service Cost — A Critical Difference
Past service cost arises when a company changes the terms of its benefit scheme — improving benefits, changing the wage base (as with the new Labour Codes), or amending the vesting conditions. The treatment differs significantly:
| Scenario | AS 15 Treatment | Ind AS 19 Treatment |
|---|---|---|
| Vested past service cost | Recognised immediately | Recognised immediately in P&L |
| Unvested past service cost | Amortised over vesting period | Recognised immediately in P&L |
| Labour Codes wage change (Nov 2025) | Amortise or immediate | Immediately in P&L — mandatory |
What the Actuarial Report Contains Under Each Standard
Under AS 15 — minimum required disclosures
- Defined Benefit Obligation at year-end
- Current Service Cost, Interest Cost
- Actuarial gain/loss for the period
- Actuarial assumptions used
- Net benefit expense recognised in P&L
Under Ind AS 19 — additional requirements
- Full opening-to-closing DBO movement table
- Current Service Cost, Net Interest Cost separately
- Remeasurements (actuarial gain/loss) allocated to OCI
- Plan asset movement (for funded schemes)
- Sensitivity analysis on discount rate, salary escalation, and attrition
- Expected maturity profile — undiscounted payments by year
- Weighted average duration of the DBO
Transitioning from AS 15 to Ind AS 19
Companies transition when they cross the applicability threshold — typically at listing or when net worth crosses ₹250 crore. The transition involves:
- Restating prior year comparatives under Ind AS 19
- Recognising the full actuarial DBO on the opening Ind AS balance sheet
- All previously unrecognised liabilities are recognised in retained earnings on transition date
- The transition date valuation must be prepared with full Ind AS 19 disclosures
Kapadia & Kochrekar has assisted numerous companies through this transition, providing both the transition-date valuation and the ongoing Ind AS 19 certificates.