Service 03 - Assurance & Audit
Actuarial Valuation.
Independent actuarial valuations of end-of-service benefit obligations under IAS 19 - prepared to audit standard, with assumptions your external auditor can accept without rework.
What we do
Employee benefit obligations,
correctly measured.
- IAS 19 end-of-service benefits Valuation of your end-of-service benefit (EOSB) liability under IAS 19, with full actuarial assumptions documented and defensible.
- Annual actuarial report Complete actuarial report for inclusion in your audited financial statements - methodology, assumptions, sensitivity analysis, movement schedule.
- Assumption-setting support Discount rate, salary growth, attrition, and mortality assumptions - benchmarked to Saudi market data and current yield curves.
- Pension and long-service schemes Valuation of defined benefit pension schemes, long-service award schemes, and other long-term employee benefits under IAS 19.
- Remeasurement & OCI analysis Actuarial gains and losses, experience adjustments, and assumption changes - correctly classified between profit & loss and OCI.
- Special-purpose valuations Valuations for M&A due diligence, restructuring, divestment, or IPO purposes - with faster turnaround and targeted scope.
Why it matters
The biggest liability most CFOs understate.
For most Saudi employers, the end-of-service benefit liability is one of the largest items on the balance sheet - larger than most loans, larger than trade payables, often rivalling retained earnings. And yet it's frequently calculated by a spreadsheet formula that ignores the core economics: the time value of money, future salary growth, employee turnover, and mortality. The result is a liability that appears tidy on paper but won't survive audit scrutiny.
IAS 19 requires a proper actuarial valuation with defensible assumptions. Done properly, it gives a realistic view of your obligation, separates current service cost from finance cost, and correctly routes remeasurements through OCI. Done poorly, it leads to audit adjustments, misstated earnings, and a liability that jumps unexpectedly when the auditor's actuary takes a different view. The fee for doing it right is a fraction of the cost of doing it over.
Our approach
Four phases.
Designed for audit acceptance on first review.
Data gather
We collect your employee census - dates of birth, joining dates, current salaries - along with historical attrition data. Data cleansing is part of scope, not extra.
Assumptions
Discount rate from current Saudi government bond yields; salary growth from your policy and market data; attrition from your actuals. Each assumption justified in writing.
Valuation
Full projected unit credit valuation - service cost, interest cost, remeasurements - reviewed by a senior actuary before issue.
Report & support
A formal actuarial report for your auditor, plus direct support responding to any auditor queries on methodology or assumptions - included in the fee.
Deliverables
What you receive.
Actuarial valuation report
A complete report documenting methodology, assumptions, results, and sensitivity analysis - signed by a qualified actuary.
IAS 19 disclosure schedule
Ready-to-paste disclosures for your financial statements - opening balance, service cost, interest cost, remeasurements, closing balance.
Sensitivity analysis
Impact of +/-1% change in discount rate and +/-1% change in salary growth - the standard sensitivity disclosures IAS 19 requires.
Movement reconciliation
Year-on-year reconciliation of the EOSB liability with every component identified - for transparent audit review.
Assumption justification memo
A short technical note explaining every assumption, with supporting data sources - pre-empting auditor queries.
Auditor liaison
Direct support for your external auditor's actuarial review - calls, clarifications, additional analysis as needed.
Who this is for
Four profiles we serve best.
Mid-to-large employers
Companies with 200+ staff where EOSB liability is material to the balance sheet and disclosure matters.
IFRS-reporting companies
Any Saudi company reporting under IFRS (all SOCPA-registered companies) requiring IAS 19 compliant valuations annually.
M&A targets and acquirers
Transaction parties needing independent verification of the EOSB liability as part of due diligence or SPA negotiation.
Subsidiaries of foreign groups
Saudi operations of international groups needing IFRS-compliant valuations for consolidation into group accounts.
Regulatory context
The standards we apply.
IAS 19 - Employee Benefits
The international standard for recognising and measuring employee benefit obligations - including post-employment benefits like Saudi EOSB. Projected unit credit method, defensible assumptions, remeasurements through OCI.
Saudi Labor Law
The statutory framework determining EOSB entitlement - half-month per year for the first five years, full month thereafter - with variations for resignation versus termination. Factored correctly into the valuation model.
SOCPA endorsement
SOCPA endorses IFRS for use in Saudi Arabia - all actuarial valuations produced to the standard SOCPA-registered auditors expect to see.
GOSI interaction
For Saudi employees covered by GOSI, EOSB treatment varies - we factor the interaction between statutory benefits and GOSI contributions correctly in the valuation.
Related insights
From our desks.
Partner notes on IAS 19 actuarial valuation practice in Saudi Arabia - assumption choice, discount rate methodology, common pitfalls.
Insights coming soon - a library of technical notes on Saudi actuarial practice is in preparation.
EOSB valuation due?
Tell us your headcount, your year-end, and when the audit starts. A senior partner will respond within one working day with a clear scope and fee quote.
Request a consultation