Introduction:

The past 15 months have seen volatile Annualised Par Yields on Government Securities (G-Sec)/Discount Rates due to the pandemic lockdown. However, rates seem to have been more stable in the last few months at shorter- and medium-term durations, despite the second wave of the pandemic

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Comments & Insights:

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• The G-sec rates have increased compared to last year as the economy and businesses have gained some momentum and are steadily converging to normalcy.
• Rates as on 30-06-2021 for tenures ranging from 3 to 9 years have nominally decreased by an average of 0.01% when compared to31-03-2021 Rates.
• Rates for longer tenures seem to have increased morethan the rates for short tenures and have shown steady increase since Unlock 3.0 on account of the kick-starting of various economic activities.
• For longer tenures, increasing 30th June 2021 G-sec rates when compared to 31st March 2021, would lead to an Actuarial Gain due to change in Financial Assumptions, if all other Assumptions remain the same as last valuation

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Some Important Links:

Indian Accounting Standard 19 - https://indasaccess.icai.org/download/2019/asb0719/272/272asb-cias-2019-20-vol2-24.pdf

Accounting Standard 15 (R) - https://www.mca.gov.in/Ministry/notification/pdf/AS_15.pdf

Accumulating Compensated Absences Actuarial Valuationconsiderations2021http://www.kapandit.com/assets/newsletter/Accumulating_Compensated_Absences_Actuarial_Valuation_Considerati ons_for_2021.pdf

Interest Rate Updates: -

March 2021 - https://www.ka-pandit.com/assets/newsletter/Interest-Rates-Updates-March-2021.pdf

December 2020 - https://www.ka-pandit.com/assets/newsletter/Interest-Rates-Updates-December-2020.pdf

September 2020 - https://www.ka-pandit.com/assets/newsletter/Interest_Rates_Updates_September_2020.pdf

June 2020 - http://www.ka-pandit.com/assets/newsletter/Interest-Rates-Updates-June-2020.pdf

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