Leave Liabilities

[Amy_T]

Hello,

I have a quick question regarding lieave liabilities. Our accountant wants personal and annual leave liabilities to show on our Balance Sheet. I have set this up using journals between the newly created liability and expense accounts for each liability and reconcile it each month against the entitlements report. I have also over-ridden the annual leave, leave loading and personal leave wages payroll catagories so that they go to the liability accounts i have created (as per the MYOB instructions). My question is that when i run the P&L the newly created expense accounts appear with dollar amounts due to the journals, however the wages for the month is already accounted for in the Wages and Salaries Expense account so i am worried that the monthly wages expenses are being inflated and shown in two places. Is someone able to clarify this for me?

Thanks in advance for your help.

Amy 

[GDay53 · Accepted solution]

@Amy_T

Welcome to the MYOB Community Forum, I hope you find plenty of useful information.

As long as you are following the MYOB SUPPORT NOTE  Tracking Leave accurals as liabilities  there will be no problem.

If you look at each step seperately you will understand it better.

Firstly the adjustment via the Journal. With this journal you increase or decrease the amount in the Liability account and the expense account, according to the actual amount outstanding at that time. the value used comes from the Entitlement Report.

When an employee actually takes leave - because you have overridded the expense account with the liability account the value of the leave take is taken from the liability account, and it is not reported to the any expense account.

The only time the expense is added to is when you do the Journal adjustment entry.

So you can see that you are only reporting the leave expense once.

[Amy_T]

Thank you for your quick response Graeme - that is much clearer to me now. I have been doing it correctly so that is a relief, thank you so much for the clarification and help.

Kind Regards

Amy