Holiday Closure
Our offices will be closing at 1:00 p.m. on Wednesday, July 3rd in advance of the July 4th holiday and will reopen Monday, July 8th.
Our offices will be closing at 1:00 p.m. on Wednesday, July 3rd in advance of the July 4th holiday and will reopen Monday, July 8th.
effective date: 12/18/12
Correctly identifying revenue is critical from an accounting and financial reporting standpoint. The first task in identifying revenue is to look at every dollar received from an outside source (as opposed to dollars received from another FOPPS) and decide whether it is revenue, a balance sheet activity, or a reduction of expense.
The following types of financial transactions, which result in an increase in financial resources, should be recorded as revenues. Note: These are examples, and the list is not intended to be all-inclusive.
The majority of resources coming into the University are revenues. It is important, however, to be aware of exceptions and to understand how to determine if a payment meets the definition and criteria of a balance sheet transaction or of a reduction of expense.
The balance sheet presents financial position as of a specified date. The following types of transactions are examples of payments received by the University that are not revenues and that should instead be posted to a balance sheet account: (Note: These are examples, and the list is not intended to be all-inclusive.
The following types of transactions are examples of payments received by the University that are not revenues and that should instead be recorded as a reduction of the related business expense. In some cases, recording a payment as contra expense is an admission that University resources were improperly used to pay for the transaction initially.
Note: The following are examples, and the list is not intended to be all-inclusive.
Sample comparison, application of revenue vs. expense reduction: A campus copy center charges all users on a per copy basis. Since the copy center has been established as a fee-for-service business, all monies received by the copy center in exchange for services are recorded as revenue. Now consider a departmental copy machine, inadvertently used by an employee to make personal copies. The employee subsequently reimburses the department for the copies made. Since the departmental copy machine was not established as a self-supporting service center, the monies received by the department are recorded as a reduction of the related business expense.
All revenue must be recorded in the University's Finance System using one of the three broad revenue classifications, or categories, listed below. Note that within each of these categories, revenue is further categorized to reflect the type of revenue. The SRECNP (Statement of Revenues, Expenses, and Changes in Net Position) Table identifies all revenue accounts and their respective categories.
Revenues derived from activities that (a) are associated with providing goods and services for instruction, research, public service, or related support to entities separate from the University, and, (b) are exchange transactions as defined in Section D. Examples include student tuition and fees, sales and services of auxiliary enterprises, significantly all grants/contracts, and interest on student loans. (This list is not all-inclusive.)
Revenues that do not meet the definition of Operating Revenues (above) or of Other Revenues (below) are considered nonoperating. Nonoperating Revenues are primarily derived from activities that are non-exchange transactions as defined in Section D. Examples include (a) gifts and contributions, (b) revenue from sources defined as such by GASB (Governmental Accounting Standards Board) Statement No. 9, such as investment income; and, (c) state appropriations, Pell Grants, and other sources defined as such by GASB Statements Nos. 33 and 34. (This list is not all-inclusive.)
Revenues derived from capital activities and endowment. Examples include capital appropriations, capital grants and gifts, and additions to permanent endowments. (This list is not all-inclusive.)
Revenue must be recorded under the accrual basis of accounting. For operating revenue, this occurs when services or goods are provided. Nonexchange transactions are recognized as revenue when all eligibility requirements are met as prescribed by GASB No. 33 Accounting and Financial Reporting for Nonexchange Transactions (GASB No. 33.)
Furthermore, revenue must be recorded in the correct Fund. The Fund identifies the source of the money being received and spent. For a list of Funds that appear on the University's financial statements, refer to the Financial System Values - ChartField document at https://www.cusys.edu/controller/fin-system-values.html.
Unless approved by the Associate Vice President/University Controller, there are no exceptions to this procedural statement.
Questions about the classification of revenue, or which Fund to use for a transaction, should be directed to the appropriate campus finance office.
1800 Grant Street, Suite 200 | Denver, CO 80203 | Campus Box: 436 UCA
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