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(Last Modified on January 10, 2011)

1. At the end of the fiscal year, adjustments are necessary for encumbered expenses related to GSFIC-funded projects to ensure accurate Budgetary and GAAP ledgers. Note that the entries below are not required for MRR encumbrances that are funded by State appropriation. In the Actuals ledger, a manual journal entry must be made to record the gift revenue related to the encumbered expense:

   Year-End Manual Journal:
   DR   12xxxx   A/R-GSFIC   Actuals ledger
           CR   4853xx   State Gifts (Noncapitalized)
           Or   4854xx   State Gifts-Capitalized

   Because the encumbered expense is not recognized for GAAP purposes, neither is the related gift revenue. The adjustment made above in the Actuals ledger must be reversed in the GAAP ledger:

   Year-End Manual Journal:
   DR   4853xx   State Gifts (Noncapitalized)   GAAP ledger
           Or   4854xx   State Gifts-Capitalized
           CR   12xxxx   A/R-GSFIC

2. In the subsequent fiscal year(s), payments made for prior year encumbrances will follow the same journal steps as Items 6 through 8 in Section 18.3.2, with the exception of the GSFIC Receivable and related Gift Revenue entry in the Actuals ledger (Section 18.3.2, Item 6). This entry was accomplished in #1 above.

   An adjusting entry does need to be made in the GAAP ledger, as payments are made for prior year encumbrances as follows:

   Manual Journal in Subsequent Year(s):
   DR   12xxxx   A/R-GSFIC   GAAP ledger
           CR   4853xx   State Gifts (Noncapitalized)
           Or   4854xx   State Gifts-Capitalized

   When all such encumbrances are processed, the A/R balance in the GAAP ledger will zero out and State Gift Revenue will be recorded accurately for GAAP purposes in the correct fiscal year.