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 16:41

46

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

Moderator

15-Jun-20 11:43

SFM Launch
IL Pass percentages
Tally Free
Quote
Refer
EMI
Lazypay
Past_Exams