OSL
This query is : Resolved
VEDANTA DESHIKA
(Querist)
29 June 2010
I have a very basic doubt about Outstanding Liabilities/Provisions.
Normally company provides for telephone, water, electricity, power, tds payable,salary, wages and other recurring expenses at the end of the year for which bills are later obtained.
However only some expenses are provided for as they know the figure approximately .
suppose u do vouchin of Subsequent month i.e. April of next FY, u may find some bills pertaining to March and before. And also these are not recurring in nature. So, shud we find out all those subsequent vouchers and make an OSL/Provision as on 31-Mar-10.
What is the correct way to determine the amount of Provisoion & OSL .?
Pls guide
Normally company provides for telephone, water, electricity, power, tds payable,salary, wages and other recurring expenses at the end of the year for which bills are later obtained.
However only some expenses are provided for as they know the figure approximately .
suppose u do vouchin of Subsequent month i.e. April of next FY, u may find some bills pertaining to March and before. And also these are not recurring in nature. So, shud we find out all those subsequent vouchers and make an OSL/Provision as on 31-Mar-10.
What is the correct way to determine the amount of Provisoion & OSL .?
Pls guide
DEEPIKA GOEL
(Expert)
29 June 2010
To determine the correct way of booking of all provision, is to review the ledger. Lets take an example of telephone and water bills, they will definately accure on monthly basis. If any of the month expense is missing and for which bill will receive in next financial year, we can book the expense related to March. Similarly in case of rent, maintenance charges and security charges.
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