Yearly bonus amount is prepared in the month of April and entered in the balance sheet. But I have a query regarding the decision that how the management decide the percentage of bonus say 8.33 to 20%.
Suppose company gave 20% bonus in 2012-2013. Now the HR department created the bonus by calculationg 20% for the year 2013-2014 and same has been entered in the balance sheet. After creating the balance sheet we have to calculate the available surplus from the balance sheet and set on and set off register. But when the available surplus register is maintained it is come to know that there is no profit.
1. Now when no profit available, can the management reduce the percentage amount of bonus from 20%. If the company do so the bonus amount will be different the amount that was entered in the balance sheet.
Dinesh Kumar

From India, New Delhi
Dear Mr.Dinesh
Normally the the reason for preparing the quarterly profit and loss account and balance sheet is for reviewing such provisions and to know the position of the company in its financial side. What was the status till its third quarter?
Why the profit set on and set off were not decided while taking into consideration of the Bonus Percentage as 20%.
Nowadays whether you have set on or set off or making profit or loss, you must pay the minimum bonus. Already you have taken the provision of 20% for making the payment of Bonus to the employees. Now how can you change the percentage. If the same scenario is continued then you can amend it for next year while giving provision of Bonus. But this year you must pay only 20% Bonus as it is shown in the books.

From India , Hyderabad
Thanks for quick reply.
But set on and set off register are also maintained from the current year balance sheet. Suppose Last year bonus percentage was 20% and the HR will give the bonus figure by calculating the same percentage. But when the Balance sheet is finalized and the bonus amount has been entered that was given by HR department. We calculate the available surplus and set on and set off register. If we do not have the sufficient surplus or the set on amount is less then what to do in that situation.
Dinesh Kumar

From India, New Delhi
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