Compensated absences

Learning objectives

• Distinguish accumulating and non-accumulating paid absences and when each is recognised.L2
• Calculate the accrued expense for accumulating absences from the number of days carried forward and the cost given in a case.L2

Normative references

• IAS 19 §13The expected cost of short-term paid absences is recognised, for accumulating absences, when employees render service that increases their entitlement to future paid absences (including non-vesting entitlements, para. 15) and, for non-accumulating absences, when the absences occur.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

2 questions

• Evrard SA has two paid-absence schemes: annual leave not taken, which can be carried forward to the following year, and sick leave, which does not accumulate and is paid only when an absence actually occurs. At the reporting date, 1,200 days of annual leave are carried forward and no employee is on sick leave. Which treatment is correct at the reporting date?L2
• Carvin SA has carried forward accumulating paid leave to the following year. The cost the entity expects to bear for the carried-forward days is {workshop} for the workshop, {offices} for the offices and {logistics} for logistics. Two other amounts appear in the file: {sick}, the cost of non-accumulating sick leave taken in December and already expensed, and {lapsing}, the cost of days earned that expire on 31 December with no carry-forward possible (case data). Calculate the liability to recognise at the reporting date for accumulating absences.L2