AS 15 Employee Benefits: Prepare the Data for Review

Payroll has 25 employees but the benefit valuation file contains only 22. The useful result is a working that explains the facts, the calculation or classification, and the evidence behind the conclusion. This guide shows how to prepare that working and where a reviewer should investigate before accepting the result.

Scope and applicable period

Financial reporting for FY 2025–26 under the applicable Accounting Standards (AS) framework. Assess entity-specific applicability and relief. Ind AS requirements are a separate analysis.

Verification date: 11 October 2026. Figures and rates identified as assumptions are teaching examples; apply the stated conditions and the actual facts to a real assignment.

The key principle

AS 15 treatment depends on the benefit type and applicable entity requirements or relief. The accounting team should supply complete and consistent employee data before relying on a valuation. Defined-contribution expense differs from defined-benefit obligations. An actuary's calculation does not correct missing employees, wrong salaries or service dates supplied by the entity.

Worked example

Identify the three missing employees and determine whether they legitimately fall outside the relevant plan or were accidentally excluded. Check birth, joining and leaving dates, salary components, plan terms and benefit payments. Reconcile opening obligation, expense, contributions, benefits and closing amounts from the valuation and books. Do not replace the valuation with a simple headcount multiplier: employee ages, service and pay make the liability non-linear.

A practical sequence

Confirm the employee-benefit framework and reconcile employee census data with payroll records and scheme terms. Check joining dates, salaries and benefit eligibility before sending valuation inputs.

Review the valuation’s assumptions and movement schedule against the books and expected events. Apply the required expense and disclosure treatment for the entity.

A lower valuation than last year may reflect several factors; do not replace it with an unsupported percentage of payroll.

Choose the framework before drafting the note

Recognition, measurement, presentation and disclosure are related but distinct. First establish whether the entity follows AS or Ind AS and whether company Schedule III or ICAI non-corporate guidance governs presentation. Then determine the accounting treatment and assemble the applicable disclosure. A well-formatted note cannot cure an unsupported asset, liability or income figure. Reconcile note schedules to the trial balance and preserve comparative information. Where relief applies to an entity, assess the particular standard or guidance rather than assuming that small size removes every requirement. Record significant judgement with the supporting facts.

Evidence checklist

Keep the following records linked to the same entity, period and working version. Identify missing items explicitly; a checked box should mean the document was examined and supports the stated conclusion.

• Applicable standard and entity-relief assessment
• Employee master and payroll reconciliation
• Plan terms and eligibility records
• Actuarial input, assumptions and valuation where required
• Expense, funding and obligation movement working

Common mistakes and how to avoid them

• Accepting an incomplete employee population. Compare the conclusion with the applicable standard and entity-relief assessment and resolve any conflicting facts.
• Multiplying a valuation by a headcount ratio. Trace the affected item to the plan terms and eligibility records before finalising the working.
• Confusing plan contributions with closing benefit obligation. Use the expense, funding and obligation movement working to make the final position and remaining exceptions clear.

Before you finalise

Recheck the example’s assumptions against the actual assignment, resolve the identified exceptions and make the final figure or conclusion traceable to its source. Preserve the reviewed version and the reason for material changes. For this task, the expense, funding and obligation movement working should agree with the conclusion presented to the client, reviewer or authority.

Frequently asked question

Does an actuarial report make payroll reconciliation unnecessary? No. The valuation depends on the completeness and accuracy of the underlying employee and plan data.

Sources and further reading

• ICAI Accounting Standard AS 15
• ICAI AS 1 — Disclosure of Accounting Policies

Related guide: Year end accounting adjustments accruals prepayments cutoff.