Page 2 - 12. COMPILER QB - INDAS 19

INDAS 19 –

EMPLOYEE BENEFITS

(TOTAL NO. OF QUESTIONS – 9)

INDEX

S.No. Particulars Page No.

1 RTP Questions 12.1

2 MTP Questions 12.5

3 Past Exam Questions 12.12

RTPs QUESTIONS

Q1 (Nov. 18 & 19)

st
A Ltd. prepares its financial statements to 31 March each year. It operates a defined benefit retirement
benefits plan on behalf of current and former employees. A Ltd. receives advice from actuaries regarding
st
contribution levels and overall liabilities of the plan to pay benefits. On 1 April, 2017, the actuaries advised
that the present value of the defined benefit obligation was Rs. 6,00,00,000. On the same date, the fair

st
value of the assets of the defined benefit plan was Rs. 5,20,00,000. On 1 April, 2017, the annual market
st
yield on government bonds was 5%. During the year ended 31 March, 2018, A Ltd. made contributions of Rs.

70,00,000 into the plan and the plan paid out benefits of Rs. 42,00,000 to retired members. Both these
st
payments were made on 31 March, 2018.
st
The actuaries advised that the current service cost for the year ended 3 1 March, 2018 was Rs. 62,00,000.
th
On 28 February, 2018, the rules of the plan were amended with retrospective effect. These amendments
meant that the present value of the defined benefit obligation was increased by Rs. 15,00,000 from that
date.

st
During the year ended 31 March, 2018, A Ltd. was in negotiation with employee representatives regarding
planned redundancies. The negotiations were completed shortly before the year end and redundancy packages
were agreed. The impact of these redundancies was to reduce the present value of the defined benefit

st
obligation by Rs. 80,00,000. Before 31 March, 2018, A Ltd. made payments of Rs 75,00,000 to the employees
affected by the redundancies in compensation for the curtailment of their benefits. These payments were
made out of the assets of the retirement benefits plan.

12.1