GASB Statement 101 changes the accounting and reporting model for compensated absences, which will have a significant impact on governmental entities.
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- The Governmental Accounting Standards Board (GASB) has issued a new statement that updates the definition of compensated absences and how they will be accounted for under U.S. GAAP.
- The GASB statement includes a unified model for accounting and reporting of compensated absences, including a definition of a compensated absence, common examples of benefits affected by the GASB statement, and scope exceptions.
- The GASB statement provides guidance on calculating compensated absences and on reporting the applicable liability and accounting guidance for associated salary-related payments and sabbatical leave.
- The provisions of the GASB statement take effect for fiscal years beginning after Dec. 15, 2023, with early adoption permitted.
- Governmental entities need to consider the population of applicable benefits that could be affected by the new guidance as well as impacts on accounting system capabilities to aggregate and perform calculations, changes to internal control processes, preparation of the required accounting journal entries, and financial statement presentation in the year of adoption.