NEW DELHI: The first impact of the labour codes will be felt in the December quarter results with companies making higher provision for gratuity. “Companies will need to update their gratuity liability provisions in line with Ind AS 19, recognising past service liabilities as the new labour codes came into effect on Nov 21, 2025. Many companies are in the process of obtaining actuarial valuations to true up their gratuity liability provisions, and the impact may be reflected in the Dec quarterly results. If such a true-up is not performed, companies may provide a disclosure explaining why it was omitted unless the impact is immaterial,” said Kuldip Kumar, partner at Mainstay Tax Advisors, a consulting company.
