EMPLOYEES

BENEFIT
EXPENSES

&

FINANCE COSTS
BY QUDSIYAH ADVANI
12-I
EMPLOYEES BENEFIT EXPENSES

Employees Benefit Expenses means payments made to and for the benefit of
employees shown in the notes of accounts. For example, wages, salaries, bonus,
leave encashment, staff welfare expenses etc. are shown in the notes to accounts
on Employees Benefit Expenses and the total amount is shown on the statement
of Profit and Loss against Employees Benefit Expenses. These expenses maybe
further divided into
1. Direct Expenses like; wages, bonus, leave encashment
2. Indirect Expenses like; Salaries, Bonus, leave Encashment, staff welfare
expenses and Employees compensation Expense.
FINANCE COSTS
Finance Costs means costs incurred by the company on the borrowings that is; loans
taken by it, It includes interest paid on borrowings such as term loans, bank overdraft
and cash credit limit from banks and from others such as public deposits, debentures,
bonds etc.

Finance Costs also include expenses incurred on the borrowings such as loan
processing fee, discount on issue of debentures and premium payable on redemption
of debentures etc, as these expenses are incurred by the company for borrowings.

NOTE: Bank charges are not shown under finance costs but are shown under ‘other
expense’, as they being an expense for services availed from the bank.