Calculation of leave ecashment

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Querist : Anonymous

Querist : Anonymous (Querist)

09 November 2012 Whether acturial valution is neccessary for recognsization of accrued liability on leave encashment. Whether it can not be provided on estimation basis. Whether AS 15 permits the estimation method (average salary x average leave x no. of employees).

Amol S Joglekar

Amol S Joglekar (Expert)
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11 November 2012 There are very specific rules for LEAVE encashment. Encashing the leave without proceeding on leave is not permitted. Max no of days' leave that can be encashed is also another issue. Estimation, therefore, provides a good method in such a case.

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Querist : Anonymous

Querist : Anonymous (Querist)

24 November 2012 Thanks for reply, but my basic question is : Whether provision of leave encashment on estimation basis instead of actualrial valution is permissable under AS 15.

Amol S Joglekar

Amol S Joglekar (Expert)
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24 November 2012 Yes. It is very much permitted.

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