 Welcome back after tea break. Let's get back to AS 15. So we have done short term benefits. We have done post employment benefits. Now is the time for other long term benefits. Sir, NPS is a defined contribution plan. Right. And Contributory Provident Fund is also a defined contribution plan. Right. So in case of Contributory Provident Fund, Gratuity is eligible. But in case of NPS, it is not eligible, sir? See, in case of NPS, your NPS contribution is calculated on the basic pay plus DA. The DA component is there. But in case of CPF, only basic pay is taken into consideration. So in that way, some additional benefits the government is already giving to you. Compared to the CPF, isn't that? Another thing is there. No, what we are feeling is CPF come Gratuity scheme. Your NPS is not NPS come Gratuity scheme. So tomorrow, if government declares that there may be a Gratuity scheme linked to NPS, then we will have to think about this. Now it is because CPF come Gratuity, no? No, that means NPS is not covering Gratuity. No, as of now. But debt Gratuity is also not eligible. You have a question or you want to answer? Is under NPS debt Gratuity is also not eligible? Ma'am, there are many people who want to answer your question. So more than questions, I have answers now. In fact, whether this letter has been received by other issues or not, this Gratuity is being allowed with the NPS in fact. That's why I wanted to share. Gratuity is being, Gratuity is being given along with the NPS that later is there from the government. Gratuity will be given. Those who are inducted in NPS, the Gratuity will also be given to them. Pension Act is covered under pension act and Gratuity is covered under Gratuity Act. Two act is completely different. There is no relation between pension and Gratuity. We will share that later. See, let's discuss NPS separately some other time. Yes, it's an entirely new area of problems. No, sir, it should be cleared because we have to make the provisions in our accounting. So it should be cleared, sir. Because if Gratuity is due, then we have to provide the provision. Definitely the provision has to be made for that. I think, I think Mr. Bokshi, I would request on behalf of this house, Mr. Bokshi may organise one separate workshop on NPS. No, no, actually for implementing actual accounting, provision is to be made. So this should be cleared now. Problem is NPS is not clear. Hence accounting is not clear. Once NPS is clear, we can give you the accounting. Let's proceed to other long term benefits. Okay, we have discussed leave encashment in other long term benefits. What happens to sabbatical leaves? Is there eligibility for sabbatical leaves? Yes, how many, yes, yes, please, how many leaves is eligible after how many years? How many leaves? One year leave after five years. Do you make a provision for this? Do you account for this leave? No. How is this leave different from leave encashment? Only that it cannot be encashed. No, I am saying how is it different from your normal leave encashment? Because it cannot be encashed. Only difference is encashment. Otherwise it is like any other leave, right? Now, we spoke in the morning that even if it is not encashed, we should make a provision for this based on actual valuation. Sabbatical leaves of one year after five years, the eligibility which you have, you should make a provision for the same from the first year onwards basis your estimates of how many people will take leave of what period and as I said because you know today we are working extra so that we get compensated after five years. Hence, we should account for that compensation which I will receive after five years today onwards. So, there should be a provision made for the sabbatical leave also and that should be basis actual valuation because it is other long-term employee benefits. Any questions on this? Yes. Absolutely. Hence, we should estimate how many people will take this leave? So, my estimate will be probably only ten percent of my employees will go for a sabbatical leave. Maybe five percent, maybe two percent. Right. So, I can create a provision based on my estimates and those estimates can be made by actually. My only point is even if one employee is going to take that leave, I should account for that one employee. How this estimate will be done? How many faculty are likely to take sabbatical leave? How it will be arrived? Because it is very difficult, almost uncertain. See. It varies to university to university, region to region, zone to zone. Absolutely. See, when there is a actually, actually is a professional person who is trained to be actually. They are trained to make these estimates. So, estimates are not to be done by us. Actually, we can do the calculation. First of all, we have to give the input. You have to give the data that how many professors I have, how many years they have worked, what is my past experience, basis. How that data will be arrived. Sorry. In university, how many faculty are going to take sabbatical leave, how it will be. I have to give them data of how many faculties I have. They will estimate how many faculties will take leave. I have to give them the facts, which is these many faculties I have. These are working for these many years. In my past, say they will calculate basis, my past that in last four years, how many faculties have taken sabbatical leave? Actually, what happened, all of a sudden ten faculty applied for sabbatical leave. Nobody knows who will apply, when apply. It depends upon what work they have to do. Right. It is very, very difficult to know the estimation. Sir, any other leave is as difficult as sabbatical leave. No, no. I will not know how many employees will go for a one month leave in the next year. So far, leave in casement or leave is considered as per rule. But sabbatical leave, optional. One can take, one cannot take. Because it is not incasable. See, basically there is estimates, estimate might go wrong and estimates have to be done by actually, that is what a cruel basis of accounting is. It might be difficult and your estimates might go wrong. Yeah. You have to estimate something so that I provide for it right now because it will happen in future. Okay. If nothing happens, I will reverse the provision. If excess happens, I have to create more expenditure. But I have to book something, I have to create something over the years. But in case... It might be very nominal amount. It might be, you know, you have to estimate that. Actually, in case of sabbatical variance, variance would be very high. Very difficult to predict. Maybe. But you have to do that and actually we will do that. Okay. Then this problem we will have to face in the university. What about child care leave, sir? Sorry? Child care leave. See, child care leave also you will have to give data to actually that these many women employees, I don't know, now even paternal leaves are there. Yes. Not just paternal leaves, they have paternal leaves in some organization. So then you have to see these estimates I or you cannot make. These estimates have to be made by actually only. Now, first of all, you have to think whether these are material. For a year, I mean, if a person goes on a paternal leave or maternal leave. Child care leave, something different. Child care leave. Child care leave. I have to first estimate whether there will be a material impact in that year if a person goes. And how many person will go on a child care leave in a year? So you have to estimate whether there is an impact which is material. If yes, then you have to ask actually to calculate the impact and start making a provision today onwards. As per AS 15, whatever leaves eligibility an employee has, you have to make a list of those. See, basically what an organization does is, they have a HR policy. HR policy will list down eligibility of all the leaves. This is that HR policy and actually calculates provision. So, he knows what is the eligibility of each and every leaf. So, that is what you have to do. You have to give a complete list of leaves which an employee is eligible to take. Sir, actually we are making provision to calculate the, to estimate the future liabilities. Right. In case of sabbatical leave, any liabilities coming in future liabilities is arising. Is it a paid leave? No. No, we are not, yes, sorry, paid leave, but we are not carrying forward. Any future liability is not arising. It is a paid leave. Yes. Yes. You are paying, but he is not working. Yes. Yes, because he is not working, you are not able to generate revenue from his services. In future also. No. One second. In that case. Suppose in the sixth year, he takes a sabbatical leave. Right. You are paying him salary. Right. Yes. Yes. Because he is not working, I am not able to generate revenue. Yes. But I still have to pay him his salary for that period. Yes. Now, why am I paying him that sabbatical leave salary? Because he has provided me service for five years or six years or ten years. There is specific difference. So, I have to make a provision each year. There is specific difference between two type of leaves. One, normal leave encashment and the sabbatical leave. Absolutely. In case of normal leave encashment, specific liability is arising. I have to pay something. But in case of sabbatical leave, there is no specific liability is arising. So, in that case, we have to make provision or not. My accumulating leaves can be of two types. Westing, non-westing. Westing leaves are those which can be encashed. Non-westing leaves are those which cannot be encashed. I explained in the morning that whether I can encash a leave or I may not be able to encash a leave, I have to still make a provision because in a particular period an employee is providing me extra service for which he is compensated in the next period. May be six years hence, may be ten years hence, may be fifteen years hence. Because he is being compensated for a service he is provided in the past, I have to make provision in the past. I mean I have to start making provision today onwards so that I can make. I have that fund created for the future. Now I might have to pay the fund as leave encashment or I might have to pay it as a normal salary. But there is an expenditure for me against which there is no revenue. But sir, actually if I take the whole period of service of a particular employee, in that case, no liability will arise. And in that case, this is my opinion that prudence will prevail. Why are you paying him a salary when he is not providing service? Will you pay to any person even if he is not providing any service? I will not pay him anything if he is not providing me service. Why will I pay him a salary? In that case, actually a person who has given thirty years of service and have not taken any sabbatical leave, you are paying a certain amount, suppose thirty lakhs. And a person who has given thirty years of service and I have given thirty lakhs and he has given service of twenty nine years six months. So payment is thirty lakhs and service has given twenty nine years thirty lakhs. If I take the whole period of service, then no separate liability is arising. So I think this is my opinion, in that case prudence will prevail and liability has not to be made. Your idea of a cruel concept is incorrect. Because see, when he provides me thirty years of service without taking any leaves. Basically he is providing me services. The employer is benefitting because he is not taking any leaves. I am talking about only sabbatical leave. Any leave? I am talking about any leave. Other leave, I agree with you. What you have told in other leave is fine. Whether it is uncashable or not uncashable, I am paying him for a period without him providing me any service. Why am I doing that? Because he has provided me service for past five years, six years, ten years. Because of that he is getting a benefit of one year. And hence, those years should have an extra hit in the PNL, in the income and expenditure account. Okay, you are not convinced? I will give you an example. Okay, previously people used to think that earth is not round. Earth is rectangular. Someone said no, earth is round or earth is oval. Okay, that time people were shocked, how can earth be oval? I can't see. I can't see. Today if someone tells you that earth is not oval, earth is triangle, will you accept? Do you know earth is oval or earth is round or earth is square or earth is triangle? Can you see it? There might be reasoning. I am also explaining the reasoning. It is about whether you are accepting the reasoning. I just want to know my long end friend. Why does he sanction the subparticle? What is the path of the actor? A professor applied and a sanction is given for subparticle. What are the reasons behind it? What are the reasons? Just explain. That means he is contributing indirectly to the university, to the institutes. That is why he has been subparticle. That means he is actually working. Why are you trying to bring some unrelated matter and digress the speaker? Subparticle's purpose is altogether different. He is actually working. He is actually working. Sir, then there is no question for provision. That is why on regular salary he is getting. There is no question of provisioning carrying forward. He is writing a book or he is doing higher studies and that university will be limited by his studies. Then sir, there is no question of making provision. Then there is no question of making provision. That is why I am trying to say. That is the reason. That is why I am trying to say. Normal salary. I think we are not... See, let us... There is no specific liability. Clearly. When I will make provision. Okay. One second. How many people are not convinced? If there are very few who are not convinced, then I will move on and we will cover this later. If there are more people who are not convinced, then let us discuss this. So we will continue. I will discuss with you later on separately. Right? Sir, point what you explained is CTC actually. Cost to the company. Right. Cost to the company. CTC. It is absolutely... Following the approval accounting system. Whether paid... He is not convinced. I will discuss with him later on. Rest of you all are convinced. I am happy. Okay. There are two types of termination benefits. Notice pay and VRS. As I said, these two benefits, you will come to know only when it actually arises. And hence, these two benefits, you will make a provision only when you are committed to it. When I say committed, that means a VRS I have announced that I will give VRS to 50 employees. Now, then as an employer, I am committed to this scheme. So I should make a provision for this scheme at that time. Similarly, notice pay. Notice pay is... I should make a provision only when that happens. So these two benefits, I will not make a provision today. I will not do any discounting. I will not do any actual valuation. I should account for these two benefits only when it comes. Booking of expense whenever it comes and then I pay off liability to bank. A summary of whatever we did today, there are four types of benefits. As I said, short-term, post-employment, other long-term termination. Short-term, you do not have any actual valuation. Post-employment, I said defined benefit plan, you have to do actual valuation. Defined contribution plan, no actual valuation. Other long-term benefits, yes, you have to do actual valuation. It might be your leave and cash fund. Termination benefit again, no actual valuation because you will account for those termination benefits whenever it comes. That is the end of Accounting Standard 15.