Page 251 - Group Insurance and Retirement Benefit IC 83 E- Book

200 AS 15

104. Sometimes, an enterprise is able to look to another party, such as an
insurer, to pay part or all of the expenditure required to settle a defined
benefit obligation. Qualifying insurance policies, as defined in paragraph
7, are plan assets. An enterprise accounts for qualifying insurance policies
in the same way as for all other plan assets and paragraph 103 does not
apply (see paragraphs 40-43 and 102).

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(f)(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 value of obligation 1,258

Rights under insurance policies that exactly match the
amount and timing of some of the benefits payable
under the plan.
Those benefits have a present value of Rs. 1,092 1,092
106. If the right to reimbursement arises under an insurance policy that
exactly matches the amount and timing of some or all of the benefits
payable under a defined benefit plan, the fair value of the reimbursement
right is deemed to be the present value of the related obligation, as
described in paragraph 55 (subject to any reduction required if the
reimbursement is not recoverable in full).

Return on Plan Assets

107. The expected return on plan assets is a component of the expense
recognised in the statement of profit and loss. The difference between the
expected return on plan assets and the actual return on plan assets is an
actuarial gain or loss.