Accruals and Deferrals

Type

Applicability

Accounting

Reverse?

Accrued Expenses

Goods or services received or provided to MIT in FY07 for which payment will not be made until FY08. DO NOT accrue the expenses if invoice has been entered by Accounts Payable in June but is not expected to be paid until after year end because these will automatically accrue on your cost objects. In the absence of an actual invoice make a reasonable estimate.

Debit appropriate cost object and cost element and Credit
internal order
1216800 using the same cost element.

Yes, in period 1, FY08

Accrued Income

Goods or services provided by MIT in FY07 for which payment will not be received until FY08. If actual billings will not occur until after closing, make a reasonable estimate.

Credit appropriate cost object and cost element and Debit internal order
1078201 using the same cost element.

Yes, in period 1, FY08

Deferred Expenses

Goods or services paid in FY07 that relate to FY08. Examples include prepaid rent and insurance. DO NOT defer expenses not covered by FY07 budget. If Accounts Payable has processed an invoice by June 30th and the activity relates to FY08 these expenses should be deferred.

Credit appropriate cost object and cost element and Debit internal order
1121400 using the same cost element.

Yes, in period 1, FY08

Deferred Revenue

Income received in
FY07 that relates to FY08 activities or services. Example: deferred subscription revenue for publications to be issued in FY08.

Debit appropriate cost object and cost element and Credit cost object 1225201 using the same cost element.

Yes, in period 1, FY08