The Institute of Chartered Accountants of India (ICAI) has issued clarifications on the accounting implications of new labor codes, effective November 21. Companies must recognize increased gratuity liability and changes in leave obligations as expenses in their interim financial statements for the December quarter. The new codes redefine wages, potentially increasing gratuity payouts, and ease eligibility for fixed-term employees. These adjustments are to be treated as past service costs under applicable accounting standards, potentially impacting near-term profitability.