Indeed those provisions/reserves form part of the accounts and are currently audited. They are liabilities on the books just as are rent/lease payments for the premises, loans owed by the business, cost of communications, and so on.
Public Service example
Treasury Circular (nsw.gov.au)
The standard
It is legislated and a requirement but some do not adhere to the requirements.
Yes, and if the employee does move on before any entitlement is available then the business gets the benefit of that and the employee loses that entitlement. It is a law that they make provision for an employee, as it is a lawful right of the employee to receive the payments that they worked for. Just because the accrual takes years to reach entitlement rather than days does not alter that it is an earned entitlement. Hmmm maybe then the employer shouldn’t make allowance for an employee’s weekly, fortnightly, monthly pay as they aren’t an entitlement in payment for work performed if your argument was followed. An absurd outcome I would think in anyone’s opinion except maybe those stealing the worker’s entitlement.
