Synergy Ltd., is in engineering industry. The company received an actuarial valuation for the first time for its pension scheme which revealed a…

According to AS 15 (Revised) “Employee Benefits”, actuarial gains and losses should be recognized immediately in the statement of profit and loss as income or expense. Therefore, surplus of 6lakhs in the pension scheme on its actuarial valuation is required to be credited to the profit and loss statement of the current year. Hence, Synergy Ltd. cannot spread the actuarial gain of 6 lakhs over the next 2 years by reducing the annual contributions to 2 lakhs instead of 5lakhs. It has to contribute 5lakhs annually for its pension schemes.