The design of seismic resistant concrete gravity dam necessitates accurate determination of hydrodynamic pressure developed in the adjacent reservoir. The hydrodynamic pressure developed on structure is dependent on the physical characteristics of the boundaries surrounding the reservoir including reservoir bottom. The sedimentary material in the reservoir bottom absorbs energy at the bottom, which will affect the hydrodynamic pressure at the upstream face of the dam. The fundamental parameter characterizing the effect of absorption of hydrodynamic pressure waves at the reservoir bottom due to sediment is the reflection coefficient. The wave reflection coefficient is determined from parameters based on sediment layer thickness, its material properties and excitation frequencies. An analytical or a closed-form solution cannot account for the arbitrary geometry of the dam or reservoir bed profile. This problem can be efficiently tackled with finite element technique. The need for an accurate truncation boundary is felt to reduce the computational domain of the unbounded reservoir system. An efficient truncation boundary condition (TBC) which accounts for the reservoir bottom effect is proposed for the finite element analysis of infinite reservoir. The results show the efficiency of the proposed truncation boundary condition.