An Instructional Case: Making the Case for Unlimited Vacation Days at Altech

Abstract

This case exposes students to contingent liabilities, a complex topic they must grapple with in practice, via introduction of the problem of accounting for vacation pay earned but untaken. The case has been tested with both undergraduates and graduates. It is appropriate for students in an intermediate accounting course and can be completed either individually or in small groups. Grappling with issues related to contingent liabilities makes students appreciate the difficulties these present. The case allows students to consider the impact of a policy change on budgeting, firm financials, financial ratios, and the potential reaction from investors and employees. This case forces students to critically think about a little discussed business problem – contingent liabilities. Understanding the variability of a contingent liability and the firm’s handling of it constitutes the primary educational value of the case. Critical thinking and application skills are enhanced by considering the impact of both the existing contingent liability and steps necessary to eliminate it. Firms switching to unlimited vacation policies have been widely discussed in the press of late (Chen, 2020; Fontana, 2017; Henley, 2018; Jackson, 2018).

Citation

Collier, D.M. and Rozen, H. (2020), "An Instructional Case: Making the Case for Unlimited Vacation Days at Altech", Calderon, T.G. (Ed.) Advances in Accounting Education: Teaching and Curriculum Innovations (Advances in Accounting Education, Vol. 24), Emerald Publishing Limited, Leeds, pp. 109-127. https://doi.org/10.1108/S1085-462220200000024012