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Union of India - Section
Section 145 in The Companies (Accounting Standards) Rules, 2006
145. The difference (as adjusted by any related tax expense) between the transitional liability and the liability that would have been recognised at the same date, as per the pre-revised AS 15 issued by the ICAI in 1995, should be adjusted immediately, against opening balance of revenue reserves and surplus.
| Example Illustrating Paragraphs 144 and 145 | |
| At 31 March 20x6, an enterprise's balance sheetincludes a pension liability of Rs.100, recognised as per thepre-revised AS 15 issued by the ICAI in 1995. The enterpriseadopts the Standard as of 1 April 20x6, when the present value ofthe obligation under the Standard is Rs. 1,300 and the fair valueof plan assets is Rs. 1,000. On 1 April 20x0, the enterprise hadimproved pensions (cost for non-vested benefits: Rs. 160; andaverage remaining period at that date until vesting: 10 years). | |
| (Amount in Rs.) | |
| The transitional effect is as follows: | |
| Present value of the obligation | 1,300 |
| Fair value of plan assets | (1,000) |
| Less: past service cost to be recognised in later periods(160 x4/10) | (64) |
| Transitional liability | 236 |
| Liability already recognised | 100 |
| Increase in liability | 136 |
| This increase in liability (as adjusted by any relateddeferred tax) should be adjusted against the opening balance ofrevenue reserves and surplus as on 1 April 20x6. |