On Sunday, March 13, 2016, we added a new feature to KFS Account e-docs that makes it very easy to access in one place any notes and attachments ever added to the account.
This message is related to vendor types that are used for disbursement voucher payments. If you have any questions related to this information, contact Cathy Salino.
Recommended Criteria for Distinguishing between Gift/Contribution, Sponsored Contract/Grant and Educational Activity/Other Revenue
The classification of the revenue does not determine the central office (i.e., Office of Sponsored Programs or Alumni Affairs and Development in Ithaca, Office of Sponsored Research Administration or Office of External Affairs at Weill Cornell Medical College) with prime proposal and stewardship oversight. This is determined by the policies promulgated by those offices.
Occasionally, the university makes an agreement with an external entity to share the expenses of a particular activity. It might be more efficient or convenient for the department to initially pay all the expenses; however, the cost of that activity on the university’s books should only reflect its share of the expenses. In these situations, the funds received from the other party should be recorded as a reimbursement of expenses and not as revenue. Revenue should only be recorded as the result of revenue-generating activities, like providing a good or service.
In some cases, customers may pay before the unit provides a good or service for them; however, revenue should only be recorded in period when it is earned. Deposits (whether refundable or non-refundable) and early or pre-payments should not be recognized as revenue until the revenue-producing event has occurred.
The cash given to the unit is a liability because it represents an obligation the unit has to provide the good or service (and justify receiving the cash). When this occurs, deferred revenue or a deposit should be recorded.
An allowance for doubtful accounts is considered a “contra asset,” because it reduces the amount of an asset, in this case the accounts receivable. The allowance, sometimes called a bad debt reserve, represents management’s estimate of the amount of accounts receivable that will not be paid by customers. If actual experience differs, then management adjusts its estimation methodology to bring the reserve more into alignment with actual results.
Sometimes in a revenue transaction, a unit provides a good or a service and permits the customer to defer payment to a future date. In this scenario, when revenue is earned but payment is not yet received, an account receivable (A/R) should be recorded and managed. Accounts receivable are considered assets, because they represent a future resource (usually cash) to the university. Proper stewardship of A/R, like any asset of the university, is an expectation of the unit and the responsible employee.
External Organization or "Agency" funds are not university funds, and should not be recorded as revenue. Agency transactions are processed through the university accounting records as a means of assisting informally organized groups related to the university (e.g., student clubs). Agency activity is excluded from the university’s statement of activities, and agency balances are considered a liability. University Policy 3.16, External Organization Accounts is currently being updated to provide additional information.
Various university units sell goods or provide services to other university units. This results in “revenue” to the internal services unit that is not true revenue to the university (no new resources are being provided from an external source). Therefore, these sales must be offset by the interdepartmental expenses charged to the university units – in total, interdepartmental revenues and expenses should net to zero.
Many institutions have an "other" category to reflect any exchange revenues not considered elsewhere. Examples are miscellaneous rentals and sales, miscellaneous fees, and items that are not material enough to warrant separate disclosure.
