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Is it required to consider the leave encashments in gratuity provisioning as per IAS 19?
If so how do you estimate the values?
in IAS 19 - Employee Benefits by

1 Answer

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Yes. You should take such arrangements even if they are not obligatory.

IAS 19.61 "An entity shall account not only for its legal obligation under the formal terms of a defined benefit plan, but also for any constructive obligation that arises from the entity’s informal practices. Informal practices give rise to a constructive obligation where the entity has no realistic alternative but to pay employee benefits. An example of a constructive obligation is where a change in the entity’s informal practices would cause unacceptable damage to its relationship with employees"
by Level 5 Member (25.6k points)