According to Generally Accepted Accounting Principles (GAAP), accrual accounting requires expenditures to be charged to the fiscal year and period in which goods are received or services are performed, regardless of when budget or cash is available.
Invoices and other purchases, such as Concur or Duck Depot transactions, for $5,000 or more for goods or services that will be received (partially or entirely) in a future fiscal year should be allocated to the appropriate prepaid expense account code. To remove the prepaid and recognize the expense, post a reversing journal voucher with a transaction date in the fiscal year and period that the goods or services are to be provided. This journal voucher may be processed ahead of time if the future period is open. Purchases of less than $5,000 are not amortized over future fiscal years; they are expensed in the current fiscal year.
Tax reportable expenses must first be coded to an expense account code when processing an invoice. For a list of 1099 tax reportable account codes, please see the following website: UO Fiscal Policy Manual.
For amounts of $5,000 or greater posted as expense that should be prepaid expenses for future periods or fiscal years:
Debit Department Index Prepaid Expense Account Code
Credit Department Index Expense Account Code
To remove the prepaid and recognize the expense in a future period or fiscal year:
Debit Department Index Expense Account Code
Credit Department Index Prepaid Expense Account Code
*** It is important that beginning balances in prepaid expense accounts are reversed prior to year-end. To review prepaid expense account codes or any other general ledger accounts, use FGITBAL/FGIGLAC. Some prepaid expenses, such as airfare for travel, may be initiated outside of your department.
Common prepaid expense account codes:
|A5019||Prepaid Services & Supplies|
|A5022||Prepaid Capital Assets|
|A5023||Prepaid Software Expenditures|
|A5030||Prepaid Misc Expense|
If you have any questions please contact Financial Services at 6-3524.