<div class=”d4p-bbt-quote-title”>fishthumper wrote:</div>
The carry over and Bank thing is starting to go away more and more each year. For account purpose those large amount of carry over hours are treated as future expense – This is starting to impact the bottom line with a lot of large companies and is the reason more and more of them are doing away with it. I know 3 different friends who use to be able to carry over lots of unused vacation/PTO hr’s each year who no longer are allowed to. Several of them were told that they had to use up all carry over hours by the end of the year or they would lose them. Several of them ended up taking the last 3 months of the year off to use up the hours. Now they are no longer allowed to carry over any hours. They have to use up all vacation and PTO time or they lose them.
Carrying PTO from year to year is not a future expense for a company. Whenever a company “awards” you any number of PTO/sick time hours, the expense goes straight to the Company’s bottom line (i.e. increases expenses), in the period in which the expense was incurred… Meaning if you earned 3 weeks of vacation throughout 2019, your employer took the expense for those 3 weeks in 2019 whether or not you used any of those hours. They do not take the expense in the future when you actually use the PTO. The do carry a liability on their balance sheet for the accrued vacation, but the expense hits the bottom line in the period in which the employee earned the PTO hours.
Don’t think this is correct. Liabilities transition to costs on the income statement when they’re expensed in the appropriate period. Otherwise, if you took the expense in the current period AND also capitalized it in the BS, you would ‘Double dip’ as it’s called when it was expensed again. Hopefully We don’t have to get the SEC and/or IRS after you….
