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