HARESH MISTRY (ACCOUNTANT) (32 Points)
26 April 2020Respected Sir,
My new company establish as on 1.3.2019
we do not accounting provision of gratuity provision in f.y. 2018 - 19
Now my question is
can i pass the entry of gratutity Provision in account for the f.y. 2019 - 20
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 26 April 2020
The applicability of Gratuity arises only when the employee has been with the organisation for five or more years. Since yours is a start up, you can create this provision now because the future outflows are after five years. If it is mandatory to create the provision from beginning, then disclose the 1 months gratuity adjustments, and mention how much you’re providing.
To me, this sounds fine.
CAclubindia
