A trust runs a school & college. The staff has gone to court against the trust for implementation of revised pay according to the pay commission.As on 31.03.2010, the situation was the same but subsequently out of 40 staff members 34 persons entered an out of court settlement and accepted the revision in pay. the management has paid25 lacs on June 10th, 2010.6 staff members have pursued the case & the case is now with the honourable supreme court of India and the decision has not yet come. Question is whether the 25lacs paid by the management should be provided for in the accounts of 2010 or only disclosure will be enough. It is pertinent to note that the dispute between the staff members and the management is of 3 years old and no provision has been made by the management except a disclosure in the notes to accounts saying that the amount cannot be quantified and hence only the contigent liability has been disclosed.
I seek the valuable guidence of the members in this regard.
CAclubindia
