Unpaid leave as a liability
SabrinaM
Registered Posts: 2 New contributor 🐸
I accounted for unpaid leave for the first time last year, charging (debit) a new code under the P&L accounts and accruing the amount (credit) under the balance sheet.
However, I am wondering what will happen this year when I reverse the accrual. The accrual will be debited and cancelled but against what do I credit the unpaid leave?
Many thanks for any help.
However, I am wondering what will happen this year when I reverse the accrual. The accrual will be debited and cancelled but against what do I credit the unpaid leave?
Many thanks for any help.
0
Comments
-
Hi Sabrina,
it would be reversed on the same code in the P&L showing a credit on that account for the current financial year.
However in my opinion, If this is a liability for unpaid holiday at year end vs the company holiday accrual period, I would keep the liability on the balance sheet each year and then post a journal based on the current year end amount, either increasing the liability or reducing depending on amount of holiday not taken by the year end.
However that would be based on what’s best for company and how they want to show there ongoing liabilities.0 -
Please accept my apologies Matt for not responding sooner. Thank you so much for your clear response. Much appreciated.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 323 NEW! Qualifications 2022
- 165 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 88 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership