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IAS 19

Forums › ACCA Forums › ACCA FR Financial Reporting Forums › IAS 19

  • This topic has 0 replies, 1 voice, and was last updated 4 years ago by silviacalina.
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  • November 11, 2020 at 12:18 am #594661
    silviacalina
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    Hello.
    I come found this.
    Can someone help me with?

    The human resources department has reported that there are about 1,000 factory employees of Easy who are entitled to 20 days of paid annual leave each year. The entitlement accrues evenly through the year and unused leave maybe carried forward for one year only. Each year, the current year’s entitlement is used before any balance brought forward from the previous year.

    The estimated total wage expense for the factory workers for the year is $840,000. The workers do not work at weekends or on public holidays so this means there are 253 working days per year.

    At 30 September 2020, all the employees have two days unused leave and management’s estimates, based on past experience, are that:

    -75% of employees will take 22 days of holiday in the year to 20 September 2021 (including the two brought forward days)

    -15% will take 20 days (losing their brought forward days), and

    -10% will take 18 days (losing their brought forward days and with two days to carry forward to the following year)

    In your report, you are required to:

    Explain, with suitable calculations, the liability that should be recognised for unused leave in Easy’s statement of financial position as at 30 September 2020.

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