No Vacation from Estimating Compensated Absences

GASB’s recent guidance on compensated absences is being implemented by governments with fiscal year-ends December 31, 2024 and later. This recognition and measurement guidance requires governments to estimate a liability for leave that has been earned but not used, including sick leave.  The process for determining a “more likely than not” and estimating this liability has stirred a lot of discussion amongst governments.

This session will examine the various types of leave organizations provide to their employees, the ways in which the obligations for compensated absences are incurred and settled by governments, and how these obligations are properly accounted for, reported, and disclosed.  The session will also discuss the importance of the flows assumption in estimating the amount of leave that is more likely than not to be used in the future. 

Who Will Benefit: Government finance professionals managing compensated absences and related accounting/reporting.

• Identify when an organization should recognize a liability for compensated absences
• Identify what information is necessary to measure a compensated absence liability and how to obtain or estimate, if necessary, that information
• Correctly measure a compensated absence liability
• Prepare the appropriate journal entries and financial statement note disclosures for compensated absences