Governments recognize expenditures and liabilities for compensated absences in governmental-type funds when the employee earns the benefits-regardless of when the benefits are paid.

Question

Quizplus · Accepted Answer

Governments recognize expenditures and liabilities for compensated absences in governmental-type funds as the liabilities mature (i.e., as they come due for payment) each year on the occurrence of relevant events, such as when claims are settled or an employee resigns. Any portion of the liability that has not matured is considered general long-term debt, rather than fund debt.

Governments Recognize Expenditures and Liabilities for Compensated Absences in Governmental-Type