Section 13 - Accounting
Section 13.4 - Accrual Accounting and Obligations
Date: 3/27/2006 — Approved: Finance Board
The AS maintains its accounts and prepares financial statements using the accrual basis of accounting. Under this method of accounting, revenues are reported when earned, and expenditures are reported when materials or services are received. Under this method of accounting, expenses incurred at the balance sheet date are accrued and expenses applicable to future periods are deferred. Receivables and payables are accrued for year-end reporting purposes.
Accrual accounting, particularly when government funds are involved, may need to be modified to meet timing and reporting needs and specific measurement objectives of the institution. These adaptations can best be referred to as "modified accrual accounting." The AS uses a modified accrual accounting system.
Under the AS's modified accrual accounting system, expenses are not reported until the materials or services are received. Obligations for materials or services which have not been received, as of the reporting date, are not reported in the AS financial statements. Depending on the reporting requirements, they may or may not be included as allocations of fund balances in the statement of financial position.
Internal services
Obligations for internally provided goods and services are not recognized nor recorded in AS accounts.
Year-end reporting
Obligations against all funds, regardless of amount, are recognized and recorded as of June 30 each fiscal year. Obligations are described in some reports as an allocation of fund balances. In other reports they are described in footnote disclosures. During the fiscal year all A.S. departments recognize and report significant obligations.
Need something else? Go back to the Table of Contents.
