Actuarial accounting valuations

Mercer is a leading provider of actuarial consulting services, a member of the Gulf Cooperation Council and has a specialized team of actuarial consultants with Arabic-speaking ability.

IAS 19 Liability Valuations

The International Accounting Standard 19 (IAS 19) was rolled out on 1st July, 2016. Under this legislation, UAE registered organizations are legally obliged to follow certain reporting standards for employee benefit programmes, including end of service benefits. Accounting teams need to be aware of how end of service funds should be calculated, and consequently, how these funds should be reflected in financial statements.
  • The amount to be reflected in the current income statement
  • The amount to be recognised on the balance sheet
  • The descriptions required in the footnotes of financial reports

How Mercer can help

Actuarial valuations calculate the 'present value' of future payments made to employees as part of the employee benefit plan.

The purpose of an actuarial valuation is to calculate the ‘present value’ of payments that need to be made to employees in the future as part of an employee benefit plan. Below are the types of periodic actuarial valuations of employee benefits that Mercer performs.

  • End of service

    As a defined benefit under IAS 19, end of service benefits must be measured and disclosed on financial statements.
  • Long service awards

    Leave and financial benefits can accompany tokens of appreciation for long service awards. This may include long-term paid absences or sabbatical leave.
  • Repatriation allowances

    Such allowances vary depending on the returning country, however, employers are required to provide an allowance as defined by calculations made under actuarial assumptions.
  • Accrued leave encashment

    Employees are entitled to encashment of any leave accrued up to date, as long as said leave is consumable up to and including the final date of service.
  • Defined benefit plans

    All plans that are not categorized as contribution plans are defined benefit plans. On top of direct contributions, other factors including age, length of service, and compensation are also factored into the equation.
  • Post-retirement medical plans

    Post-retirement medical plans are part of post-employment benefit obligations. Actuarial assumptions like mortality, turnover, retirement age, and other financial assumptions are to be considered.

Why Mercer Middle East?

Four reasons to choose Mercer for actuarial accounting valuations
  • Experience with the “Big Four”
    Our Arabic-speaking team of actuarial consultants have worked with leading private and public companies, including the “Big Four” firms locally, and globally.
  • Best-in-class accrual processes
    We’ve developed sophisticated tools and methodologies to quantify employee benefits, obligations and accruals quickly, efficiently and correctly.
  • Client confidentiality is our top priority
    While streamlining processes, our actuarial consultants adhere to strict quality-assurance and data protection processes and ensure client confidentiality.
  • Training and knowledge transfer
    Actuarial valuations aside, a core part of our consultants’ service is to ensure training and knowledge transfer to your finance team.

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    Make sure you’re in compliance with the International Accounting Standard 19 (IAS19)