Compensated absences are absences for which employees will be paid, such as vacation, sick leave, and sabbatical leave. Vacation leave and other compensated absences with similar characteristics should be accrued as a liability as the benefits are earned by the employees if the leave is attributable to past service and it is probable that the employer will compensate the employees for the benefits through paid time off or some other means, such as cash payments at termination or retirement (GASB Summary Statement No. 16).