Discussion:Accrued PTO

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Discussion Forum Index --> Consumer Questions --> Accrued PTO

Optionshedge (talk|edits) said:

10 May 2009
When a company requires its employees to take PTO (Paid-Time-Off) days, what is the impact on the company’s balance sheet, income statement, and statement of cash flows?

My understanding is that the accrued PTO shows up as a liability on the company’s balance sheet. So forcing employees to take PTO would reduce the liabilities on the company’s balance sheet.

But how are the income statement and statement of cash flows impacted?

Solomon (talk|edits) said:

10 May 2009
What was the Dr entry when the liability was created?

Houstonp (talk|edits) said:

12 May 2009
There is no impact to the income statement. PTO just runs through salary expense as if the employee worked 40 hours. If the company is use/lose, then there is no liability accrued. If no liability, then no cash flow effects either.

Ritamiller24 (talk|edits) said:

20 October 2009
Can you accrue PTO balances at the end of the fiscal year (sept 30) and deduct for expense for federal tax purposes ( assuming all PTO will be bpaid out by December 31?

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