CIRCULAR NO. 72
No. 500-31/2006-07/BSNL/CA I
Dated,
the
To
The Chief General Manager
All
Kolkata & Chennai Telephone District / All
Telecom Factories / Task Force Guwahati
ALTTC / TTC / NATFM / IT Pune / TS Kolkata / T&D
/ Data Network / NCES / QA BG
Sub: Accounting of Productivity linked incentive
for the year 2005-06 and wristwatches
given to the
employees in commemoration of completion of 5 years of BSNL .
The provision for payment of
productivity-linked incentive for the year 2005-06 has been made by the circles
in the accounts of 2005-06 on the basis of the amount of incentive policy
declared for the financial year 2004-05. It is apprehended that the actual
expenditure for payment of productivity linked incentive for the financial year
2005-06 may be more than the provisions made for the said liability due to
enhancement of the upper limit of the productivity linked incentive. The
expenditure on account of payment of productivity linked incentive that is over
and above the provisions for 2005-06 shall be accounted as Current Year's (i.e.
2006-07) expenditure and not as prior period items since any excess expenditure
over and above the provision / estimate is due to the decision taken in the
current financial year. As per Accounting Standard 5 accounting estimates by
their nature are approximation and changes in the accounting estimates due to
additional information, which becomes known subsequently, are not treated as
prior period items. Provision for productivity-linked
incentives has been made on the basis of estimates and as such changes due to
decision taken subsequently don't constitute prior period items.
The
expenditure on account of giving wrist watches to the employees of BSNL in
commemoration of completion of 5(Five) years of BSNL shall be booked under the
accode 1722804 and 4712804- GIFTS .
(P K Purwar)
DDG (CA)
Copy
to:-
1.
GM(Finance) / IFA of all Circles,
BSNL for information and necessary action
2.
ADG (R&P), Corporate Office,
3.
CAO (TCO), BSNL, Kolkata
4.
CPAO (ITI Bills), BSNL