AS 15

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SUMAN

SUMAN (Querist)

08 July 2009 ON WHICH COMPANIES ACCOUNTING STANDARD 15 (GRATUITY)APPLY.THANKS IN ADVANCE

Ankur Garg

Ankur Garg (Expert)

08 July 2009 Hi Suman,

As per my opinion first of all check the applicability of Payment of Gratuity Act, 1972.

Please find below Section 1 of Payment of Gratuity Act, 1972 covering applicability of the Act.

1. SHORT TITLE, EXTENT, APPLICATION AND COMMENCEMENT. - (1) This Act may be called the Payment of Gratuity Act, 1972.
(2) It extends to the whole of India : Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.
(3) It shall apply to - (a) every factory, mine, oilfield, plantation, port and railway company;
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.
(3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.
(4) It shall come into force on such date as the Central Government may, by notification, appoint.

Regards

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

08 July 2009 All companies are expected to follow Accounting Standard 15 (AS)issued under Companies (Accounting Standards) Rules,2006. But in para 5 of the press note dated 13/05/2008 realeased by the Ministry of Corporate affairs it is stated that some of the requirements of Accounting Standards may prove to be onerous for Small and Medium Sized Companies(SMC's), who may not have the necessary resou
rces to apply these requirements and incur associated compliance costs. So certain exemptions/relaxations to SMC's have been incorporated in the AS's to enable SMC's to apply the broad frame work of AS in simple manner.
Notification GSR 739E dated 07/12/2006 defines SMC'S as follows:-
1)whose equity or debt securities are not listed in any stock exchange in India or abroad.
2)which is not a bank,financial institution or insurance company.
3)whose turnover does not exceed Rs 50/- crore in previous year.
4)which does not have borrowings in excess of Rs.10/- crore and
5)which is not a holding or subsidiary company of a company which is not an SMC.
Accordingly paragraph 11 to 16,50 to123 and 129 to 131of AS 15 are nor applicable to SMC'S.

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