Dear All,
In CARO we show the disputed matters pending with the goverment authorties such as disputed income tax matters, service tax matters, excise matters etc and need to quantify the same.
My question is : whether we need to make provison of such disputed amounts in our books of accounts ?
Regards.
Whether a disputed amount needs provision in the books or not need to be seen from the perspective of AS-4 and AS-29
A provision is required to be made in the books for any liability that would be incurred.
In case of disputed amounts there's no need to make any provision in the books until there's an final outcome of the disputed amt if it is to be paid or no. So such disputed amounts shall be disclosed by way of Contingent Liability in the books.
Jawahar and Associates Chartered Accountants
Hyderabad
CA Inter
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Interactive Media Pvt Ltd.
New Delhi
CA Inter
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CAclubindia
