leave liability report

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Hi, please advise how to run leave liability report at a specific date? and how to updated LSL as the  LSL balance is nil.  
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Becky Wang

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Posted 1 month ago

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Kevin Russell, Accredited Partner

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You cannot. Long service leave is not usually accrued because it is not usually paid.
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John Graetz

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Whilst there might not be an obligation to pay LSL before 7 years, it is not uncommon for the LSL to be accrued and, for some business, they pass an accrual entry for deferred LSL.  Wherever I have been, LSL has been accrued for employees to see - the setup for this is in the same place in the Employees Record section as the setup for Personal and Annual Leave, Becky.
On another point, I do not rely on the accrual information produced by Reckon and run a separate spread sheet instead.  Unfortunately, Reckon has restrictions on the number of decimal places that can be used, in other words it is not finite enough, whilst, to make matters worse, there are instances where Reckon refuses to accept the input of an accrual rate and overrides the input and changes it to something different instead.
John L G

I agree with John in that I too always set this up to accrue accordingly. 

If the employee leaves before it’s payable it can easily be zeroed out, otherwise it’s already calculated for you upon payout.

 

Can’t say I’ve really had issue with the accuracy of leave calculations/accruals – Yeah, Reckon does sometimes round them off (particularly with Personal Leave accrual!) but I’ve always found the minor variance negligible ?

 

Regarding the Leave Report, if you need to change the dates rather than report on current status, you could generate the Leave Accrual Summary. 

(Unfortunately, you can’t add any further columns - for $ values etc - but it does give you the same Used v Available hours for each leave type you have set up)

NB You need to set up the LSL in the employee's Leave tabs though (just like other Leave) in order for it to accrue & report correctly.


Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com


(Edited)
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Kevin Russell, Accredited Partner

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I don't agree with John for the reasons stated although if you INSIST on accruing for it there is no problem in putting away 1/60 Of your wage bill every week. I'm pretty sure the ATO will disallow the expense however.
It's the liability provision that's recorded in the balance sheet, it's not claimed as an expense (unless it's taken/paid of course)
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John Graetz

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The accrued leave on pay slips is a non value entry, giving an indication of the leave which is available and this in turn would be reflected in the Liability Report.  As such, this information in itself, does not generate any entries on the balance sheet, unless this is done manually.  Consequently, accruing the information on the pay slip or payroll records, is totally different from accruing it on the balance sheet e,g, 1/60th of the wages bill.
John L G 
(Edited)
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Kevin Russell, Accredited Partner

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Shaz that's not the way accruals work. When you create the liability you also create an expense. It's called double entry accounting. It's been that way since Pacioli invented it in the 15th century.
(Edited)
Kevin, I meant it's not claimed for tax purposes in the tax return but yes, the provisional amount is often accounted for in the Bal Sheet & P&L, particularly in larger businesses:

Accounting Definition: A provision is an amount set aside for the probable, but uncertain, economic obligations of an enterprise. A provision is an amount that you put in aside in your accounts to cover a future liability. ... When accounting, provisions are recognized on the balance sheet and then expensed on the income statement.


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Kevin Russell, Accredited Partner

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Shaz except you cant have a liability without a corresponding expense which was kind of my point. And you're probably right. It's unlikely to be deductible. It's recorded whether or not the leave is taken. When the leave IS taken you would credit the cash and debit the liability.