Whenever a company requires valuation of gratuity and leave encashment liabilities under AS 15 (R) for the first time, it is mandated to complete valuation for 2 years - i.e. the current year and the previous year. 

This is because the valuation reports are like a balance sheet, presenting the asset and liability figures for the past 2 years. 

One of the purposes of the valuation report is to show the liability in the balance sheet. The other purpose is to show the amount that has to be carried forward into the profit and loss account. 

The Companies Act also stipulates that current and non-current liabilities must be ascertained for 2 years in a row. Thus, it becomes necessary to complete valuation for 2 years.