Question: A is the only worker of Cherry Ltd. Cherry Ltd is a reporting entity and needs to determine the balance of the LSL provision as

A is the only worker of Cherry Ltd. Cherry Ltd is a reporting entity and needs to determine the balance of the LSL provision as of 30 June 2019. As of 30 June 2018, the balance relating to A was $14,167. Long Service entitlements accrue over 15 years, by which time the employee will have 3 months of LSL entitlements. If a worker leaves before 10 years, no entitlement is owing. However, from 10 years onwards, pro rata payment would be available on ceasing employment. The following are A's detail:

Salary	$85,000
Years of employment so far	11
the estimated annual increase in salary	5%pa
Probability A will stay employed for 15 years	75%
Discount rate	8%pa

Determine the balance of provision for long service leave?

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