GASB Statement No. 101, Compensated Absences updates the recognition and measurement guidance for compensated absences by:

• Requiring liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. 
• Establishing guidance for measuring liabilities for leave that has not been used, generally using an employee’s pay rate as of the date of the financial statements.
• Amending the existing requirement to disclose the gross increases and decreases in liabilities for compensated absences to allow governments to disclose only the net change in the liabilities.

The most significant changes for the state of Washington are:

1. We added certain leave types such as personal holidays, shared leave, and exchange time to the compensated absence calculation. 
2. We modified the salary-related payments included in the liabilities. Paid Family and Medical Leave premiums have been added, and we have made an adjustment to sick leave salary-related payments for the portion expected to be deposited in a VEBA account.
3. Agencies will now record the net change in the liabilities and do not need to separately record the increases and decreases. 

OFM recorded adjustments to the June 30, 2024, liability balances based on GASB’s new definition of compensated absence liabilities. These adjustments are reflected in your agency’s FY 2025 debit and credit activity for GL accounts 5125/5225, 5127/5227, 5128  /5228. They have an OFM batch type (Z1) and an OFM JV number in the current or reference document field. 

FY2025 compensated absence liability adjustment instructions have been emailed out to agencies and are provided below.

Agencies that track leave in HRMS received:

1. Memo with Instructions
2. Spreadsheet with June 30, 2025, Compensated Absence Liability balances by agency

Agencies that don’t use HRMS or have an alternate leave-tracking system received:

1. Memo with Instructions
2. Spreadsheet with Sample Calculation for June 30, 2025
3. Spreadsheet with Sample Calculation for Higher Ed for June 30, 2025

Contact your agency’s OFM Statewide Accountant if you have any questions.