LSP Valuation of Publishing Company

Valtech’s valuation team has recently completed a valuation in relation to the long service payments (LSP) of a publishing company.

Following the abolition of the Mandatory Provident Fund offsetting arrangement, companies engaged in labor-intensive industry are likely to recognize significant defined benefits obligations (DBO) and related payments in their financial statements under the new legislation. The calculations behind can be quite complicated, especially  when the employee data is largely diversified with different age groups and employment statuses. Valtech’s valuation team can help our clients to quantify the LSP obligations on a systematic and reasonable basis using our internally developed LSP valuation model.

For LSP valuation, various company-specific policies can influence the results. For example, some companies may have an early retirement policy that allows employees to retire before 65 while still being entitled to LSP payments. Some companies may provide voluntary MPF contributions or gratuities for their employees. These are significant factors in the LSP valuation. For this case, we worked closely with our client and their auditor to identify all potential issues early, ensuring that our model considered all related company policies and company-specific factors in the valuation. We are glad that we successfully assisted our client to complete the LSP valuation for their financial reporting purposes in a timely manner.