Should portable long service leave provisions be recognised on a gross or net basis?

In our May 2021 Accounting News article, Accounting for portable long service leave in the community services sector, we noted that for some portable LSL schemes the employee claims long service leave directly from the scheme, but for others, the employer still has primary responsibility to pay LSL to its employees. Depending on the rules of the scheme, employers may have a legal right to recover the whole, or a portion of, the LSL it has paid to employees.

This article has been updated to reflect that long service leave provisions should be recognised ‘gross’, and not net of any anticipated recoveries from the scheme. This is because it is unlikely that the criteria in AASB 101 Presentation of Financial Statements, paragraphs 33 and 34, will be met to offset an asset and a liability for the long service provision and related reimbursement.

Please refer to the updated article for more information.

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