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Accounting treatment for court case penalty, when company has approached higher court

avinash (ACCOUNTS) (7 Points)

17 February 2019

accounting treatment for court case penalty, when the Company has approached higher court

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Pankhuri Agrawal (Chartered Accountant) (412 Points)
Replied 18 February 2019

It should be analysed based on the likelihood of occurrence of such penalty. If it is less likely to occur, u will have to show it as contingent liability. Or if its probable that penalty will occur , u will have to show it as current liability in your balance sheet