Amortisaton of expenses VRS

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shamkant (Querist)
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17 January 2011 1)We introduce VRS scheme and paid VRS amount to left employee. What will be the accounting entry i.e whole amount debited to P& L a/c and second what effect on computation of income. pls explain

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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17 January 2011 One fifth of the amount paid has to be debited to the P&L A/c as Expenditure of this year.

Balance of the amount paid has to be written off in the next four years.
Pl Refer Section 35DDA

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