Our company offers a 50% payout of EIB balance upon termination. At fiscal year end, should we accrue 100% or 50% of the balance? Is there authoritative guidance for this? I would expect to accrue 50%, but I don't have a basis for this apart from long practice.
What Extended Illness Bank balance should be accrued?
Answers
In Calif, an accrual is made for accrued vacation pay but not for accrued sick pay when the sick pay accrual is lost when the person is no longer employed. Similarly, as you offer 50% at termination then only that 50% should be accrued.
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Accounting