Posted by Michael E. Mast, CPA, CFE
The era of GASB 16 is officially over! For state and local governments with fiscal years beginning after December 15, 2023, GASB Statement No. 101 on Compensated Absences is now in effect—representing the most significant update to compensated absence accounting in over 30 years.
What’s Changed?
- Sick Leave Recognition: The biggest shift is in how we account for sick leave. Many entities will see increased liability recognition under the new guidance.
- Salary-Related Payments: A major update requires governments to include salary-related payments (such as employer payroll taxes and pension contributions) in the compensated absence liability—not just the direct salary/wage payments. This comprehensive approach better reflects the true cost of compensated absences.
- Simplified Disclosure: Governments can now choose to disclose only the net change in compensated absence liability, rather than showing gross increases and decreases separately.
- Modernized Definitions: Updated guidance reflects how employee benefit practices have evolved since 1992, addressing inconsistencies in application.
Key Coverage
The standard applies to vacation leave, sick leave, PTO, holidays, parental leave, bereavement leave, and certain sabbatical leaves.
Implementation Status
If your fiscal year began after December 15, 2023, you’re already required to comply. December 31, 2024 filers have crossed this milestone, and it’s time to ensure full compliance moving forward.
For government finance professionals, this isn’t just a technical update—it’s about ensuring our financial reporting accurately reflects our obligations to the dedicated public servants who keep our communities running.
Not sure how to handle the GASB 101 transition? Reach out to our Governmental Agencies & Authorities Practice Group!
