11 November 2009
Bonus was provided as on 31.03.2009 as per the Bonus Act i.e minimum bonus of 8.33%.
But subsequently the company compared bonus acc to its policy ( related to performance) and as per the minimum bonus as was provided. Bonus as per the co. policy was more and was accordingly paid.
Is this excess bonus paid to be treated as a prior period expense ????
11 November 2009
Hi Kushal, In your question, u said that minimum bonus was provided in the bookswhich was not as per the company's policy(related to performance). it means that the accounting policy of the co. was not followed while making provision for bonus which is contradiction of AS 5 (case of change in accounting policy). further, in the current year excess payment was made due to error committed in the last year (not following the A/c policy). hence Excess paid is a prior period item and is required to be disclosed separately as per AS 5. regards, CA Shakuntala Chhangani
11 November 2009
But if acc to companys policy , bonus comes to be less than tht specified as per the bonus act, it becomes violation of the BOnus Act ..??
19 November 2009
Dear Statute overrides AS. hence the co. can not provide for d lesser bonus otherwise the auditor will qualify the report. since the minimum bonus is mention in the Act, the co. may go on higher side
CAclubindia
