Sec. 661.15. Compensated absences

(a) Companies shall record a liability and charge the appropriate expense accounts for compensated absences (vacations, sick leave, etc.) in the year in which these benefits are earned by the employees unless otherwise directed by this commission.

(b) With respect to the liability that exists for compensated absences which is not yet recorded on the books as of the effective date of this system of accounts, the liability shall be recorded in account 4120, Other Accrued Liabilities, with a corresponding entry to account 1439, Deferred Charges. This deferred charge shall be amortized on a straight line basis over a period of 10 years.

(c) Records shall be maintained so as to show that no more than 10 percent of the deferred charge is being amortized each year.