XYZ Corporation has a large amount in Deferred Salaries to the officers of the company. It is a small growing company and has not been able to pay out much in salaries. Should the Deferred Salaries continue to stay on the books and should XYZ Corporation continue to make monthly entries for Deferred Salaries to the officers.

If you continue to defer salaries (compensation) with and contra liailbity account it will have to funded within a resonable time to expense the deduction. To carry deferred comp with no plan to fund it, will result in a denial for that aspect of accounting

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Originally Posted by BHolmes

XYZ Corporation has a large amount in Deferred Salaries to the officers of the company. It is a small growing company and has not been able to pay out much in salaries. Should the Deferred Salaries continue to stay on the books and should XYZ Corporation continue to make monthly entries for Deferred Salaries to the officers.

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It is not to pay out in the immediate future it is quite another not to fund. In absence of proper funding, deferred compensation may be denied by the accountants.For sure, the IRS will not allow the expenditure unless paid.