Provision for diwali bonus
Satish Raj Pahari (Article) (35 Points)
29 December 2013Satish Raj Pahari (Article) (35 Points)
29 December 2013
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 06 January 2014
Dear Satish,
Verify whether they are paying Bonus to Labors in previous years regularly. If Yes, then this kind of expenses are ok as management has clear intention to pay bonus to its labors which they are following in previous years also.
Satish Raj Pahari
(Article)
(35 Points)
Replied 09 January 2014
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 09 January 2014
Dear Satish,
Agreed from your point but think that way also liability will create on diwali but bonus paid is based on annual performance done by labors through out the year thats why I think making provision for bonus on monthly basis is correct.
Provision for end service benefit...... Liability is created at the time when employee leave the company but remuneration is earned by employee through out the service life within the comapny thats why we create provision for end service benefit annualy.
Diwali bonus is almost same thing but at micro level.