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Reclassification of Non current liability to current due to events occuring after BS date

Others 300 views 2 replies
Suppose as on 31st March 2021 a gratuity liability of Rs. 1 cr was shown as non current liability. After B/S date but before it's approval by BOD the company paid the same liability of Rs. 1 Cr.
Query:
Should company reclassify the non current liabilities to current by considering the payment within 12 months as adjusting event ?
Replies (2)
As it is paid after balance sheet date the liability should be shown under notes to accounts as it was also not approved
If the employees had resigned before the balance sheet date then the liability should be classified as a current liability in the first instance. In the other case, a note about the payment made would suffice.


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