18 Non-accumulating paid absences do not carry forward: they lapse if the current period’s
entitlement is not used in full and do not entitle employees to a cash payment for unused
entitlement on leaving the entity. This is commonly the case for sick pay (to the extent that
unused past entitlement does not increase future entitlement), maternity or paternity leave
and paid absences for jury service or military service. An entity recognises no liability or
expense until the time of the absence, because employee service does not increase the
amount of the benefit.
Profit-sharing and bonus plans
19 An entity shall recognise the expected cost of profit-sharing and bonus payments
under paragraph 11 when, and only when:
(a) the entity has a present legal or constructive obligation to make such payments
as a result of past events; and
(b) a reliable estimate of the obligation can be made.
A present obligation exists when, and only when, the entity has no realistic alternative
but to make the payments.
20 Under some profit-sharing plans, employees receive a share of the profit only if they remain
with the entity for a specified period. Such plans create a constructive obligation as
employees render service that increases the amount to be paid if they remain in service until
the end of the specified period. The measurement of such constructive obligations reflects the
possibility that some employees may leave without receiving profit-sharing payments.