State Of Idaho
Office Of The State Controller
2017 GAAP Closing Procedures Manual

15 Unearned Revenue
GL 2401

Due Date: August 1

Complete this closing package for each fund that has total Unearned Revenue of $50,000 or more at June 30.

PURPOSE

The purpose of this closing package is to gather information regarding revenues and grant advances which are not earned but have been received by your agency. This information will be used to prepare the State's Comprehensive Annual Financial Report (CAFR).

ACCOUNTING PRINCIPLES AND POLICIES

The State prepares its financial statements in accordance with Generally Accepted Accounting Principles (GAAP). GAAP relating to revenue recognition and unearned revenue appear in the following authoritative pronouncements:

Governmental Accounting Standards Board (GASB) Codification Section 1600 paragraph 114
GASB Statement No. 33, paragraphs 21-25 and 29-30
GASB Statement No. 34, paragraphs 16-17, 64, and 92
GASB Statement No. 65, paragraph 31

GAAP require the State to report a liability for unearned revenue in the accounting period in which revenue does not meet the revenue recognition criteria or, in the case of grants, when the grant advance has not been expensed. Therefore, the State will record unearned revenue at June 30 as a current liability in individual funds. Existing unearned revenue (GL 2401) account balances in each fund must be evaluated to identify amounts meeting the revenue recognition criteria at June 30.

GAAP INDICATORS

If GAAP Indicators are used when processing transactions in STARS, the GAAP Indicator Report, DAFR0227, can be submitted in lieu of transcribing the information on the closing package.

GAAP Indicator applicable to the Unearned Revenue Closing Package:

C - Unearned Revenue

Click here for a GAAP Indicator Explanation

DEFINITIONS

Grant Advances – Advances from a grantor at June 30 that do not represent grant expenditures or accounts payable. Advances to subrecipients that have not been claimed as expenditures by June 30 would be included in unearned revenue in the subrecipient's grant advance closing package.

Primary Recipient – The entity that initially receives funds from the grantor and is accountable to the grantor for the funds.

Restricted Assets – Assets whose use is constrained by law or external parties, and the constraints change the nature or normal understanding of the availability of the asset.

Unearned Revenue – Revenue that has been received, but the earnings process is not complete, or in the case of grants not yet expensed.

Unavailable Revenue – Revenue that has been earned, but will not be received within 60 days after fiscal year-end. This revenue should be reported on the Accounts Receivable closing package.

WORKING PAPERS
Click here for a definition of Working Papers

GENERAL INSTRUCTIONS

Review any existing unearned revenue balances (GL 2401) and identify any amount requiring reclassification as revenue (earned and available). If a reclassification is required or if a question arises, please contact the Office of the State Controller (SCO), Bureau of Reporting and Review at cafr@sco.idaho.gov.

Review revenue to determine if amounts were received, but the earnings process is not complete. Report unearned revenue amounts expected to be earned on Form 15a in the column labeled "Unearned Amount".
Review grant advances received (including federal money received by the fund and advanced to a sub-recipient) but not yet fully expended.
Enter amounts in whole dollars.
CLICK HERE FOR SUBMISSION INSTRUCTIONS.
Complete the 15a Unearned Revenue Closing Package and/or 15b Grant Advances Closing Package and submit completed forms by August 1.

COMPLETING FORM 15a UNEARNED REVENUE FORM

Complete the header information.
The total amount of unearned revenues reported in the prior year's closing package will be calculated for you. If the prior year amount differs from the current year by 10% and the change equals or exceeds $100,000, please explain the reason for the variance in the Comments section of the form.
Enter the revenue subobject code.
Enter the amount of unearned revenue.

COMPLETING FORM 15b GRANT ADVANCES FORM

Complete the header information.
The total amount of grant advances reported in the prior year's closing package will be calculated for you. If the prior year amount differs from the current year by 10% and the change equals or exceeds $100,000, please explain the reason for the variance in the Comments section of the form.
Enter the revenue subobject code.
Enter the amount of the advance.
Enter the amount expensed or incurred.
Subtract expenses from the advance amount and enter the remaining balance.
If you have received a grant advance from a grantor who has imposed restrictions about how the resources may be used, check 'Yes' in the "Was Grant Advance Restricted at June 30?" column and provide a description of the restriction in the Comments section.
If the grant advance has been invested, check 'Yes' in the "Was grant invested at June 30?" column.