End of Service Benefits (EOSB) Valuation
The Vietnam Labor Law entitles a workman to a severance award upon the expiration of the employment contract. Such award falls under the long-term employee-benefits category and is known as End of Service Benefit (ESB)
At Presiding, FIRIS provides actuarial services, including actuarial valuations of retirement/end-of-service benefit schemes in accordance with the International Accounting Standard 19 (“IAS 19”) and related work.
Under IFRS, End of Service Benefit (EOSB) liabilities have to be computed as per the guidelines of International Accounting Standards 19 (IAS 19). Employee Benefits require entities to use the Projected Unit Credit (PUC) method to determine the present value of its defined benefit obligations with the help of actuary advice. Actuarial valuations of employee benefits may not always be straightforward, in particular when the employee base is large or when the assumptions are changing. In addition, the valuation is performed on the employee level. Hence, the actuarial liability for each and every employee of the organization is readily available. Looking at employee wise liability or storing this data for future reference can have huge utility.
IAS 19 (International Accounting Standard No 19) a part of the IFRS framework that prescribes the accounting treatment of employee benefits. IAS 19 requires entities to perform actuarial valuation to determine the present value of its obligations in respect of End of Service benefit and other employee benefits. It also requires to recognize an expense in respect of employee benefit schemes. An important concept in IAS 19 is to recognize the cost of providing employee benefit in the period when it is earned by the employee, rather than when it is paid or becomes payable.
Our actuarial valuation consultants do not just provide an estimate of liability to be recorded in the financial statements, but extended disclosures in the form of an actuarial valuation report. In addition to this, our team will provide an understanding of the actuarial valuation so that you can understand the results, validate and challenge them.
FIRIS End of Service Benefits (EOSB) Valuation
FIRIS provides End of service benefit (EOSB) actuarial valuations according to US GAAP and International Accounting Standard 19 (IAS 19) for various companies.
- An actuarial valuation of the End of Service (EOS) benefit liabilities as at the balance sheet date that will assist the auditors in the report;
- Estimation of the charge to P&L and Other Comprehensive Income (OCI) for the current year;
- Calculation of the estimated expenditure for the following financial year can be used for budgetary and interim reporting purposes.