FASB Emerging Issues Task Force Addresses Sabbatical Leave

ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Budget_Models_and_Process_Challenges_Facing_Institutions_Today.html">Budget Models and Process: Challenges Facing Institutions Today
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Hiring_for_a_Global_Campus—Why_a_Textbook_Approach_Will_Not_Work.html">Hiring for a Global Campus—Why a Textbook Approach Will Not Work
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Higher_Education_Analytics_and_Data_Driven_Decisions.html">Higher Education Analytics and Data Driven Decisions
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Common_Compliance_Pitfalls_with_Study_Abroad_Programs.html">Common Compliance Pitfalls with Study Abroad Programs
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Net_Tuition_Revenue_Price_and_Enrollment_How_Can_you_Achieve_Balance.html">Net Tuition Revenue, Price and Enrollment: How Can you Achieve Balance?

April 4, 2006

At its March 2006 meeting, the Financial Accounting Standards Board's Emerging Issues Task Force reached tentative conclusions concerning accounting for sabbatical leave or other similar benefit arrangements. The task force's discussion focused on whether, pursuant to paragraph 6(b) of FASB Statement No. 43, sabbatical leave owed to an employee accumulates. In Statement No. 43, accumulate means that earned but unused rights to compensated absences may be carried forward to one or more periods subsequent to that in which they are earned, even though there may be a limit to the amount that can be carried forward.

The scope of the task force issue is limited to those arrangements under which the sabbatical or other similar benefit arrangement is unrestricted, meaning that the employee is not required to perform any direct of indirect services for or on behalf of the entity during the absence. The task force reached a consensus that an employee's right to a compensated absence under a sabbatical or other similar benefit arrangement accumulates. Therefore, assuming all of the conditions of paragraph 6 of Statement 43 are met, the compensation cost associated with a sabbatical or other similar benefit arrangement should be accrued over the requisite service period.

FASB is accepting written responses until May 4. Comments will be considered by the task force at the June 14-15 EITF meeting. NACUBO encourages interested members to comment directly to FASB and copy NACUBO.

NACUBO contact: Sue Menditto, director, accounting policy.