Mar13. (LBO) — Sri Lanka’s accountants have come up with a digital solution to combat the shortage of actuaries in the country. The solution involves the use of a standard model, which uses minimal subjective judgments and can be calculated on a software like Microsoft’s Office Excell.
The acute shortage of actuaries in Sri Lanka have made it difficult to calculate the amount of gratuity (a payment made to retiring employees under Sri Lankan labour laws) that a company has to provide for when preparing accounts.
At the moment companies make a flat charge which is one half of a month’s salary, based on the current salaries of all the employees on the assumption that they will all retire, says Ajith Ratnayake, Director General of the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB), a accounting regulatory agency.
But this does not really conform to international standards.
Companies also do not take into account whether an employee has been with the company for five years, which is when the gratuity has to be paid.
A detailed actuarial valuation of the gratuity liabili