Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Is this a constructive obligation
- This topic has 3 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
- AuthorPosts
- April 8, 2014 at 12:27 pm #164765
The company provides a $20 meal for each employee per day as stated in the contract signed by the employees.
Is this considered a constructive obligation?
Can the company form a monthly provision for estimated expense for the subsequent month?
ie.
Average present employees per day: 75
Net working days per month: 22$20 x 75 x 22 = $33,000
April 8, 2014 at 3:49 pm #164781What makes you think this is only constructive? It’s apparently in the contract of employment (according to your post)
That makes it a legal obligation
Why would you need to make a provision? If by the end of the month / year all the meals have been allocated / eaten, why provide?
On a matching basis, expenses recognised to match the time period to which that expense relates, then …… no provision in my mind
OK?
April 8, 2014 at 3:56 pm #164784Ok. Thank you.
April 8, 2014 at 4:05 pm #164786You’re welcome
- AuthorPosts
- You must be logged in to reply to this topic.