Sent to the AFS-Update mailing list on July 9, 2021
The Year-End Department Accrual (YEDA) e-document will be available for use starting Saturday, July 10. KFS users who need to submit accruals and deferrals for expenses and income should use the YEDA to do so no later than 4 p.m. on Friday, July 16.
What Must be Accrued or Deferred?
Accrual and deferral entries are recorded based on a materiality threshold, which is $10,000 for the 2020-21 fiscal year. Individual transactions should be evaluated for accrual/deferral. If they meet or exceed the above threshold, they must be recorded to the appropriate fiscal year using the YEDA e-document. The threshold of $10k applies to most expenses and income, but some limited exceptions are listed in the fiscal closing instructions.
Keep This in Mind: Purchase orders (encumbrances) do not need to be accrued. Invoices (Payment Requests and Credit Memos) that post to the wrong fiscal year may need to be accrued or deferred if they meet the materiality threshold. No contract or grant funding should be used on the YEDA e-document.
What Documentation is Required?
The YEDA document requires specific documentation. Before you submit an accrual or deferral, please make sure you’ve provided the following:
- A brief explanation for why you are submitting your accrual or deferral. The explanation must be very clear (i.e. to an outside auditor) as to why the accrual or deferral is needed.
- For accruals – An invoice and other supporting documents must be provided that verifies that the goods/services were received or provided during fiscal year 2020-21 but booked in fiscal year 2021-22.
- For deferrals – An invoice and other supporting documents must be provided that verifies the goods/services were received or provided in fiscal year 2021-22 but booked in fiscal year 2020-21.
Please also provide any workbooks that contain calculations that support the entry. Backup documents should be attached using the Notes & Attachments tab in the YEDA document.
New Approval Requirement
The unit director, MAABO, or department head must initiate the YEDA document or be ad-hoc routed for approval before the document is submitted. If the MAABO or department head is submitting the document, they should show their approval by adding a note in the Notes and Attachments tab stating "I approve and certify this YEDA document upon submission."
If you are not sure if you need to create an accrual or deferral transaction, please discuss the potential transaction with your organization’s financial management and then contact General Accounting as needed.