Sent to KFS-Update on July 8, 2015
The KFS team is happy to announce that the Year-End Department Accrual (YEDA) e-document will be available for use starting this Saturday, July 11. KFS users who need to submit accruals and deferrals for expenses and income that exceed the fiscal year-end threshold of $10,000 should use the YEDA to do so no later than Friday, July 17.
Why are Accruals and Deferrals Required?
As covered in this year’s Fiscal Year-End workshop, the goal of the year-end accrual/deferral process is to recognize expenses and revenues in the period in which the economic events occur, regardless of when payment is made or received. This means that expenses for goods and services should be recorded in the fiscal year when they are received, and income from goods and services should be recorded in the fiscal year when they are provided.
Which Expenses and Income must be Accrued or Deferred?
Accrual and deferral entries are recorded based on a materiality threshold, which is $10,000 for the 2014-15 fiscal year. Individual transactions should be evaluated for accrual/deferral based upon this threshold and, if necessary, be recorded to the appropriate fiscal year using the YEDA e-document.
The threshold of $10k applies to most expenses and income, but some limited exceptions are listed in the fiscal closing instructions. Generally, items less than $10K should not be accrued or deferred unless there are special circumstances. If you are not sure if you need to create an accrual or deferral transaction, please discuss the potential transaction with your unit’s financial management. If questions still exist contact General Accounting.
All Accruals/Deferrals must be submitted by July 17
All campus units must submit their accruals and deferrals no later than Friday, July 17. No exceptions will be made because processing late accruals and deferrals would require other previously processed closing steps to be revised or amended.
Working with the YEDA e-Document
The YEDA document uses a two-step process to ensure that income or expense is recorded to the appropriate fiscal year. First, the YEDA records the accrual or deferral transaction you’ve specified as part of Period 12 of the 2014-15 fiscal year. The YEDA then automatically reverses that accrual/deferral in Period 1 of the new 2015-16 fiscal year. The first step ensures the expense or income is recorded in the appropriate fiscal year. The second step reverses the transaction ensuring that the actual transaction (invoice, revenue, etc.) is the only effective record.
The YEDA creates two entries on the General Ledger: an entry for the accrual/deferral and a second entry for the reversal. Both of these entries will have the “YEDA” document type.
Tips for Creating a YEDA
- The Year-End Department Accrual (YEDA) e-document will be on the KFS admin page starting on Saturday, July 11.
- The only mandatory tabs in the YEDA eDoc are Document Overview and Department Accrual Details. You should be familiar with the Document Overview tab from working on other KFS eDocs. Make sure you provide enough information so that your unit can identify what the accrual is for later.
- Before you can enter your accounting lines in the Department Accrual Details tab, you must first select an accrual/deferral type from the Department Accrual Type drop-down menu. The table below describes each type of accrual and deferral.
|A/P Accrual||For all Accounts Payable accruals (for example, DVs and PREQs) for all campus units except the Medical Center, UCI Extension, and auxiliary organizations.|
|A/P Accrual Auxiliary||For all Accounts Payable accruals for auxiliary organizations.|
|A/P Accrual UCIMC||For all Accounts Payable accruals for the Medical Center.|
|A/P Accrual UNEX||For all Accounts Payable accruals for the UCI Extension.|
|Accrual Income UCIMC||For accruing income for the Medical Center|
|Accrued Income||For accruing income for all campus units except the Medical Center.|
|Deferred Expense||For deferring an expense into the new fiscal year for all campus units except auxiliary organizations.|
|Deferred Expense Auxiliary||For deferring an expense into the new fiscal year for an auxiliary organization.|
|Deferred Income||For deferring income into the new fiscal year for all campus units except the Medical Center|
|Deferred Income UCIMC||For deferring income into the new fiscal year for the Medical Center.|
|Most common accrual/deferral types are highlighted in gold.|
- After you’ve selected an accrual/deferral type, enter in the amount of your accrual or deferral, filling out the accounting lines as you normally would.
- Nothing further is needed. No supporting documentation is required to process a YEDA although your unit may have stricter requirements.
- Check your document for accuracy because the YEDA’s workflow is accelerated and does not require Fiscal Officer approval. If desired, the initiator of a YEDA can ad-hoc route for FYI or Acknowledge.
- All YEDAs must be submitted and approved by Friday, July 17.