IndigoLearn

Forums

Cash flow statement

Can anybody explain What is voluntary separation payment and why is it in the asset side of balance sheet..?


Aruna thavamani

Aruna thavamani

CA Inter

0

13-Jun-20

159

Answers (1)

A voluntary separation scheme is established by a company struggling financially. The company offers employees the option to resign or voluntarily end their employment with the company in exchange for a certain settlement amount. Hence, the company sets up a fund to pay for future voluntary separation payments to these covered employees and that payment fund is reported as an asset in the balance sheet.


ruchi lahoti

ruchi lahoti

CA Inter

27K+

15-Jun-20

CA Inter Special Offer
CA Foundation Spl Offer
Inter Testimonials
Testimonials CA Foundation July 21