Currently many corporates provide for the pension and gratuity on the basis of current salaries of employees.
New Delhi: A new Accounting standard, AS-15, which became applicable from April 1, can seriously hit the balance sheets of most Indian corporates.
Currently many corporates provide for the pension and gratuity liability of their employees on the basis of their current salaries, but the actual payment is made on the basis of the last drawn salaries of employees.
As per the new standard, corporates will have to calculate the last salary that will be drawn by an employee and provide for pension and gratuity liability on that basis. This also has to be certified by a professional actuary.
Abizer Diwanji, Partner, KPMG and Ashwin Parekh of Ernst & Young elaborate on corporates that will feel the impact and whether the standard may be deferred.
Comments
0 comment