Accounting Revenue (Resource) Recognition

Transcription

1 Accunting Revenue (Resurce) Recgnitin Office: Prcedure Cntact: Related Plicy r Plicies: Distributin: Business Services Business Services Accunting Manager Revenue Accunt Cdes Internal Sales Cdes Revisin Histry Revisin Number: Change: Date: 001 Update cntent and frmat A. Purpse The purpse f this prcedure is t clarify the accunting recgnitin used t recrd the receipt, r transfer f resurces, whether that be frm an utside persn/rganizatin, r frm a surce that is internal t SOU. B. Definitins Agency Fund = Represent funds belnging t smene ther than SOU, and are being managed in an SOU Index/Fund simply as a cnvenience fr that utside rganizatin. A payment frm an agency fund t anther SOU campus fund will result in the recgnitin f revenue t the university. Budget = Establishing revenue and expenditure targets thrughut the university. Budget Redistributin = Reallcatin f resurces within a given fund. Expense Redistributin = Mving an expense t reside within the department unit that is respnsible fr the expense. External Surce = Individuals, r rganizatins, that d nt share the same Tax ID as SOU. Internal Sales = Exchange f services, r sale f items, between tw departments within SOU. These arrangements d nt represent revenue t the institutin, and are t be recrded as an Internal Sale (09xxx) r Internal Reimbursement (79xxx). Prprietary Funds = Used t describe funds falling int the Service Center Fund Gruping (Fund Type 13), r Auxiliary Enterprise Fund Gruping (Fund Type 20) Restricted Funds = Revenues received frm an utside party which cntain limitatin n hw the funds are t be used, and these limitatins are set by the utside party. Revenue = Receipt f funds frm an external surce, in exchange fr prviding gds r services t individuals r rganizatins. Revenue Redistributin = Mving f revenue frm ne index t anther. Either t crrect a depsit made in errr, r t mve funds cllected by ne department n behalf f anther department (example: Athletic Sprt Camps cllect fees frm participants, which includes husing csts fr participants t stay in the Residence Halls during the camp). Spending Authrity = Resurces available t spending, represented by apprved budgets. Transfer = Reallcatin f resurces between funds, where there is n exchange f services being prvided (restricted in certain funds). Page 1 f 14

2 Accunting Revenue (Resurce) Recgnitin C. Prcedures Several mechanisms that are used t recgnize the receipt f resurces within a department s index/fund. The circumstances f each situatin will dictate the mechanism that shuld be used t recgnize the receipt f funds, r the adjustment f spending authrity acrss campus departments. Accunting prcesses include: Revenue Recgnitin = The receipt f funds frm an utside individual r rganizatin. Revenue is t be recgnized using accunting cde ranging frm t (Refer t prcedure =Revenue Accunt Cdes). Page 2 f 14

3 Accunting Revenue (Resurce) Recgnitin The Accunt Cde Hierarchy Cde Reprt (FGRACTH) als prvides the placement f the accunt cdes within the reprting structures, and reflects the relatinship between the Accunt Types used fr additinal financial reprting. Accunt Hierarchy NOTE: The 09xxx categry f revenue accunt cdes des nt represent the recgnitin f true revenue. 09xxxx revenue is nt reflected a revenue n the University financial statements. As financial statements are prduced, any revenue recrded under the 09xxx cdes is instead reclassified as an ffset t the University expenses. 09xxx Revenue Accunt Cdes shuld nly be used in situatins described in the Revenue Accunt Cde Prcedure statement ( ) Page 3 f 14

4 Accunting Revenue (Resurce) Recgnitin NOTE: Use f Banner SIS Detail Cdes is ften the tl used t recrd Student Fees, given that typically all student fees are recvered by placing charges directly nt student accunts. T this end, the ability t cntrl the use f the accunt cde it managed thrugh the use f the Detail Cdes being placed nt student accunts. Example: Page 4 f 14

5 Accunting Revenue (Resurce) Recgnitin Internal Sales & Internal Sales Reimbursements = The exchanging f services between SOU departments. Excludes services prvided by an agency fund (example: Nrth Campus Raider Village). Internal sales r reimbursements DO NOT represent revenue t the institutin. These cdes are typically used nly in situatins where it is nt practical t reallcate individual expenses. Example: Print & Cpy Services (PCS) The fee they charge t campus t prvide services encmpasses all expenses needed t prvide thse services: Labr Supplies Facility Rent Utilities Other Overhead It is nt practical fr the PCS t reallcate expenses when recrding charges t campus departments. T this end, the PCS will charge the department, and recrd the credit back t the PCS as an Internal Sale (09xxx, given the PCS is a 09xxxx Service Center department). The ther benefit fr ding this, is that the PCS is able t keep all f its expenses intact, in rder t generate its wn prfit/lss statements which will aid in the ability t run the peratin and cntribute twards the setting f prices ging frward. Page 5 f 14

6 Accunting Revenue (Resurce) Recgnitin Fund Hierarchy The 09xxx and the 79xxx Accunt Cde grupings effectively represent the same thing: The reimbursement frm ne campus department t anther. The 09xxx accunt cde gruping was created previusly by the OUS (Oregn University System) when SOU was part f that system. The general structure fr thse cdes has cntinued. It may change in the future, but fr nw, it s essential functin and use is being cntinued. The use f the use f the tw types f cdes is limited based upn the fund, and lcatin within the Fund structure. 09xxx = Only used in Prprietary funds. This is where the receiving department is either a Service Center (Fund Type 13, typically funds beginning with 09xxxx ), r an Auxiliary Enterprise (Fund Type 20, typically funds beginning with 1xxxxx ). 79xxx T be used with any ther department nt falling int the Service Center r Auxiliary designatins. Neither f these Accunt Cde categries may be recrded in a restricted fund, r any ther fund that falls utside f current unrestricted perating funds grup (i.e., any funds where the fund cde is < ). If prgram revenues are being generated ff a Grant, thse will nt be recrded directly in the Grant Fund, but instead will have a separate perating fund established within the SOU fund structure. Reimbursements ( 09xxx, 79xxx ) shuld never be used in an Agency fund. Nte: Nrth Campus Raider Village is an agency fund (despite the fund cde that is attached t each f the index cdes fr the NCV, these are nt auxiliary funds). Refer t the Fund Cde Hierarchy structure t verify the type f fund: Page 6 f 14

7 Accunting Revenue (Resurce) Recgnitin The 79xxx will be recrded as a direct ffset t expenses. Was typically applied t funds cnnected t areas that experienced expenditure limitatins set by an utside party (ex: State Legislature). N adjustment is needed fr Financial Statement purpses when reimbursements are recrded using ne f these accunt cdes. The 09xxx technically (in Banner) rll up t the revenue accunt cde type. T this end, when it cmes time t prduce the financial statements fr the university, adjusting entries are recrded t reclassify these items frm revenue and psted as an ffset t expenses. Budget Transfers = Budget is used t prvide directin fr the campus, bth in terms r estimating revenue prjectins, as well as identify the csts necessary t run a department. Occasinally, departments may lk t mve funds t augment additinal activities as the year prgresses, r as activity deviates frm riginal plans. Budget Transfers are used t acknwledge the reallcatin f spending authrity WITHIN the same fund. Largely used when reallcating resurces between index cdes residing in the General Fund, but can be applied t any index cdes that are functining within the same fund. These can represent either permanent r temprary transfers f resurces. Designatins are applied in the FAST budget system at the time transfers are created. Budget transfers be used using any expense accunt cde ( data enterable, r nn-data enterable ) : Index Fund Accunt Budget Budget Cde Cde Cde Decrease Increase ABCXYZ Services and Supplies $1,000 XYZABC Advertising-Inst Prm/Pub Relatin $1,000 Transfer f Funds = Resurces being redistributed when there is n reciprcal receipt f services in exchange fr the funds being prvided, AND the mvement f funds is nt ccurring within the same fund. Examples: General Fund prviding resurces t supprt Athletics, RVTV, and JPR. Here, the GF is nt receiving any services in return fr the supprt being prvided t each f these areas. Husing supprt being prvided t Athletics. Page 7 f 14

8 Accunting Revenue (Resurce) Recgnitin Transfers are t be made using Accunt Cdes falling int the 9xxxx Accunt Cde gruping: Index Fund Accunt Cde Cde Cde Debit Credit ABCXYZ Tfr Out Frm FT11 Budgeted Ops $1,000 XYZEFG Tfr In Frm FT11 Budgeted Ops $1,000 Page 8 f 14

9 Accunting Revenue (Resurce) Recgnitin Additinally, the use f an Activity Cde is required fr all Transfers using the 9xxxxx Accunt Cdes (excludes budget entries). Activity Cdes help clarify the reasn fr the transfer and pulled in t a larger reprt that will be prvided t the Bard f Trustees (Finance Cmmittee), t help prvide a better understanding f the funds being mved frm department t department. All Activity Cdes t be used fr recrding transfers begin with the number 9. Examples f Activity Cde include: All transfers must be balanced acrss the campus (net transfers shuld always be $0.00). This includes at the budget level as well. Transfer activity is reprted t the Bard f Trustees as part f the Peridic Management Reprt. Belw is a sample f the year-end FY2018 Summary f Transfers (Subsidies): Peridic Reprt Page 9 f 14

10 Accunting Revenue (Resurce) Recgnitin Expense Redistributins = Used in situatins t better reflect the wner f the expenditure. When an expenditure is incurred, it shuld be reflected in the department wh incurred the expense, t better match the expenditures t the revenues being generated as a result f thse expenditures (excludes situatins where the Internal Sales/Reimbursements may be a mre practical apprach). Often, these may be dne when the expense was charged t the wrng index, r when it was nt practical t break ut the payment n an invice. Revenue Redistributins: Funds cllected n behalf f anther department n campus, r funds depsited t the wrng index. All depsits are cming int Banner via CashNet. If funds were depsited int the wrng index/accunt, the crrectin shuld be made in the same surce database where the errr tk place. In ther wrd, a crrectin f funds depsited int CashNet shuld be generated by prcessing a receipt crrectin in the CashNet system. If it s nt a crrectin, and instead invlves a department simply cllecting funds as a cnvenience fr anther department, the transfer f the funds can be made by JV, as a revenue redistributin. Back up t the JV shuld cntain sufficient dcumentatin t supprt the entry being made. Agency Funds = the fllwing transactins shuld never be recrded within an agency fund: Internal Sales, r Internal Reimbursements Transfers Revenues falling in the 01xxx thrugh 05xxx Accunt Cde grupings. NCV Fund Structure Page 10 f 14

11 Accunting Revenue (Resurce) Recgnitin Restricted verses Unrestricted Funds Mst perating resurces cming int the campus will fall under the unrestricted designatin. Limitatin set by the university, r the State, t nt cnstitute a restrictin n the use f the funds. Limitatins set by the university, r the State, cnstitutes internal designatins n the use f funds, which d nt rise t the level f being designated as a restrictin. Restricted funds cme abut when rganizatin/individual, wh is nt cnnected t the university/state, place a limitatin n hw the funds can be used. These typically cme abut frm tw surces: Grants: Funds prvided by utside rganizatin, r individuals, whereby the funds are being prvided t supprt an instructinal, r research, prject, with a set perfrmance duratin perid. Any funds remaining at the end f the prject are returned t the utside rganizatin/individual. All Grants are accunted fr in the Restricted Fund grup (Fund Type 31 thrugh 35) Page 11 f 14

12 Accunting Revenue (Resurce) Recgnitin Dnatins: Fund prvided by utside rganizatins, r individuals, whereby the funds are being prvided t supprt university activities, and cntain limitatins n the use f the funds (the dnr sets the terms n hw the funds can, r can t, be used). Distinctin frm a Grant: there s n time limit assciated with the use f the funds (funds are nt returned t the dnr), and there are typically n reprting requirement back t the individual dnrs. All dnatin funds are recrded in Fund Type 36, representing restricted gift funds Dnatins are then categrized by purpse, as it relates t the restrictins placed nt the funds by the dnr. Revenues in Restricted Funds shuld be psted using a 03xxx Gift/Grants revenue accunt cde. Exceptin: Interest earnings n the funds will still be psted using a 05xxx interest incme revenue accunt cde. Restricted funds may nt be transferred t be used fr ther purpses. Sme exceptins d ccur, examples: Mving funds between Federal SEOGrants and CWSP, r frm ne year t the next. Federal regulatins prvide fr the latitude t carryback, r carryfrward, funds frm ne year t the next, r t reallcate funds between the tw prgrams. When dne, these will be recrded as transfers. Mving dnatin funds prvided t supprt a cnstructin prject. Page 12 f 14

13 Accunting Revenue (Resurce) Recgnitin Other nn-perating funds als carry limitatins n the use f the funds, and include funds falling int the fllwing fund types: Capital Dnatins Intended fr Cnstructin Dnatins fr cnstructin prjects are nt recrded directly int the cnstructin fund itself. Instead, the dnatin is initially recrded in an Operating Fund, and then transferred t then transferred t the Nn-Operating Cnstructin Fund. Nte: This is an exceptin t the rule that restricted funds may nt be transferred, since it is mving the funds t the supprt the prject fr which it is being given. Page 13 f 14

14 Accunting Revenue (Resurce) Recgnitin In-kind Cntributins Revenue Recgnitin Occasinally, an utside rganizatin/individual will prvide services, r prducts, free f charge r at a substantial discunt abve their nrmal practices. T this end, SOU will recgnize the value f the dnated services/prducts. T d this, we wuld first recgnize the value f the dnatin as revenue, as well as reflecting an ffsetting expense, using the expense cde that wuld have been used t pay the vendr had the vendr nt be supplying the items as an in-kind dnatin. In-kind dnatins are still dnatins. The revenue accunt cdes will be fund in Accunt Type 53 ( 03 gruping). Example: Cmmercial Business dnatins: Cmmercial Business Gift Cmmercial Business Gift Cmmercial Business In-Kind Gift Cash dnatins will be psted using 03621, whereas in-kind dnatins under Example: A cmmercial business dnates $1,000 f free advertising t the university. This wuld be dcumented and then recgnized by psting the fllwing entry: Debit Credit Cmmercial Business In-Kind Gift $1, Advertising-Inst Prm/Pub Relatin $1,000 This prcedure may be revised at any time withut ntice. All revisins supersede prir prcedures and are effective immediately upn apprval. Page 14 f 14