Sent to AFS-Update on July 7, 2022
The Year-End Department Accrual (YEDA) e-document will be available for use starting Saturday, July 9. KFS users who need to submit accruals and deferrals for expenses and income should use the YEDA to do so no later than 4 p.m. on Friday, July 15.
What Must be Accrued or Deferred?
Accrual and deferral entries are recorded based on a materiality threshold, which is $10,000 for the 2021-22 fiscal year. Individual transactions should be evaluated for accrual/deferral. If they meet or exceed the above threshold, they must 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.
Keep This in Mind: Purchase orders (encumbrances) do not need to be accrued. Invoices (Payment Requests and Credit Memos) that post to the wrong fiscal year may need to be accrued or deferred if they meet the materiality threshold. No contract or grant funding should be used on the YEDA e-document.
What Documentation is Required?
The YEDA document requires specific documentation. Before you submit an accrual or deferral, please make sure you’ve provided the following:
- A brief explanation for why you are submitting your accrual or deferral. The explanation must be very clear (i.e. to an outside auditor) as to why the accrual or deferral is needed.
- For accruals – An invoice and other supporting documents must be provided that verifies that the goods/services were received or provided during fiscal year 2021-22 but booked in fiscal year 2022-23.
- For deferrals – An invoice and other supporting documents must be provided that verifies the goods/services were received or provided in fiscal year 2022-23 but booked in fiscal year 2021-22.
Please also provide any workbooks that contain calculations that support the entry. Backup documents should be attached using the Notes & Attachments tab in the YEDA document.
YEDA Approval Requirement
The initiator of a YEDA document must ad-hoc route their MAABO or unit director for approval before submitting. If the MAABO or unit director is the initiator of the document, they must ad-hoc route an appropriate approver – preferably their supervisor – for approval to satisfy the requirement of two department reviewers (Submitter + Approver = 2).
If you are not sure if you need to create an accrual or deferral transaction, please discuss the potential transaction with your organization’s financial management and then contact General Accounting as needed.