Gratuity Provision
This query is : Resolved
09 September 2009
Hi,
As per the company policy gratuity will be payable after completion of 5 years so why every year we need to provision. If employee resigned before completion of 5 years it is not required to pay the gratuity so please clarify why we have to provision gratuity.
As per the company policy gratuity will be payable after completion of 5 years so why every year we need to provision. If employee resigned before completion of 5 years it is not required to pay the gratuity so please clarify why we have to provision gratuity.
09 September 2009
Had you been aware of the definition of provision yo would not have ask this Q. Provision is for fiture expected liabilities only.
Manmohan ACA, CS
(Expert)
09 September 2009
2 Reasons
1. accounting should be done assuming business as going concern
2. Prudance concept
1. accounting should be done assuming business as going concern
2. Prudance concept
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