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


13-Jun-20 16:41


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


15-Jun-20 11:43