Academic journal article Journal of Accountancy

GASB 16 on Compensated Absences Issued; GASB 11 Delayed

Academic journal article Journal of Accountancy

GASB 16 on Compensated Absences Issued; GASB 11 Delayed

Article excerpt

The Governmental Accounting Standards Board issued Statement no. 16, Accounting for Compensated Absences, establishing accounting and reporting standards for compensated absences by state and local governmental entities-- regardless of the reporting model or fund type used to report the transactions.

Effective for periods beginning after June 15, 1993, Statement no. 16 requires vacation leave and similar compensated absences based on past service to be accrued as a liability as they are earned.

For sick leave and similar unplanned compensated absences, it provides a measurement option. Employers can accrue the absences as a liability as the benefits are earned but only to the extent it is probable the employer will compensate employees on termination of their employment for unused time off. Alternatively, the liability can be measured based on the sick leave or similar absences accumulated at the balance sheet date by employees currently eligible to receive termination payments as well as other employees expected to become eligible in the future.

In calculating the liability, the accumulations are reduced to the maximum amount allowed as a termination payment.

Employers also must measure the compensated absence liability at the salary rate in effect at the balance sheet date. Additional amounts should be accrued for salary-related payments such as the employer's share of Social Security benefits and Medicare taxes. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.