Managerial remuneration ( which method to choose)

Accountancy

How do we get to know which method of calculating managerial remuneration is to be applied ( whether % on Net profit one, or the slabs of effective capital one)?? How do we decide if net profit of company is adequate or not? Is there any benchmark ?

Garima Bhargava

CA Inter

★ 185

14-Sep-22 01:58

689

Answers (4)

If sufficient profits - % of net profit Else slabs

CA Suraj Lakhotia

Admin

14-Sep-22 07:31

CA Suraj Lakhotia Admin

If sufficient profits - % of net profit Else slabs

Sir but how would we know whether the profits are sufficient or not? Is there any benchmark like profits above 500000 are sufficient?

Thread Starter

Garima Bhargava

CA Inter

★ 185

14-Sep-22 12:41

You can calculate on % of net profit basis and capital employed basis. Higher of the two can be paid.

CA Suraj Lakhotia

Admin

14-Sep-22 13:11

CA Suraj Lakhotia Admin

You can calculate on % of net profit basis and capital employed basis. Higher of the two can be paid.

Ok thank you sir

Thread Starter

Garima Bhargava

CA Inter

★ 185

15-Sep-22 10:55