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Union of India - Section
Section 105 in The Companies (Accounting Standards) Rules, 2006
105. When an insurance policy is not a qualifying insurance policy, that insurance policy is not a plan asset. Paragraph 103 deals with such cases: the enterprise recognises its right to reimbursement under the insurance policy as a separate asset, rather than as a deduction in determining the defined benefit liability recognised under paragraph 55; in all other respects, including for determination of the fair value, the enterprise treats that asset in the same way as plan assets. Paragraph 120(i)(iii) requires the enterprise to disclose a brief description of the link between the reimbursement right and the related obligation.
| Example Illustrating Paragraphs 103-105 | |
| (Amount in Rs.) | |
| Liability recognised in balance sheet being the present valueof obligation | 1,258 |
| Rights under insurance policies that exactly match the amountand timing of some of the benefits payable under the plan. | |
| Those benefits have a present value of Rs. 1,092 | 1,092 |