Gratuity liabliity entry

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CA Naresh Sehra (Querist)
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19 April 2012 Kindly help me and advise how to pass entry of gratuity in books when gratuity is funded by LIC of india

Present value of obligation as per acturial valuation is Rs 23.62 crores

Fair value of Plan assets is Rs 19.06 crores

Net liability to be provided as at 31st March ,2012- Rs 4.56 crores

Opening balance in liability for gratuity is Rs 6.12 croes so we have to reduce liability by Rs 1.56 crores

On the other hand actuary is saying Rs1.55 crores to be recognised in the profit & loss account

i am confused regarding what entry to be passed and help me

CA Kishore Tallam

CA Kishore Tallam (Expert)
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19 April 2012 U should recognise the total expense as given in the acturial valuation report. The closing liability is only decreased not the expense for the year.