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Proper classification and cut-off for transactions are required in order to prepare
external financial statements in accordance with generally accepted accounting principles
(GAAP) on a timely basis. Financial statements prepared in accordance with GAAP are
important within the context of demonstrating that the University has been a responsible
trustee for funds obtained from a multitude of stakeholders.
Goods and services received in June should be recorded as current year fiscal
expenditures; goods and services received after June 30 should be recorded in the ensuing
fiscal year. In addition to ongoing review of transactions and balances in applicable cost
centers at year-end, departments should pay particular attention to appropriate cut-off
for transactions during June and July.
Procedures
Each year the Office of Financial Affairs (OFA) distributes flyers with May financial reports
providing (1) a summarized closing schedule and (2) year-end closing pointers.
Additionally, for those involved with corporate finance responsibilities, a technical
closing calendar also is prepared. Information for specific years is available on the OFA Website.
Departmental staff should note the key deadline dates for submitting various documents,
e.g., travel claims and invoices, to ensure expenses are recorded in the appropriate
fiscal year. For areas such as petty cash reimbursements, receipts for July purchases
should not be mixed with those of June or earlier.
Payments for items such as subscriptions, dues, maintenance agreements and other
services covering a period of time generally should be made in the fiscal year in which
service begins. If the period of service begins in July, however, maybe may be made in the
prior fiscal year. |
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