This is an example regarding the reason for taking rates effective at the BS date for compensated absences liability :-

Example:-

We always use the rate that we are most likely to settle in. If I have 15 vacation days left at the balance sheet date (end of the year) and I can carry them over, when I use them (assume April 16th)I will be paid based upon my current rate which will be at least the rate that was in effect at the balance sheet date.

Atleast, now I won't attempt the above question wrongly :)