On which financial statement would the transfers in transfers out accounts be reported?
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Transfers allow the university to move funds between two or more accounts. From an individual account perspective, transfers have a similar effect as revenues (transfers in) or expenses (transfers out), but from an institutional perspective, transfers do not represent "real" revenues or expenses, and must net to zero. Show Since transfers are only for moving university funds, they cannot be used in External Organization (EO) accounts, which we may hold or manage for an organization, but are not university funds. There are also special considerations that need to be made when transferring funds between fund groups – certain funding cannot be comingled with other types of funding. Transfers vs. ExpensesTo support proper management and reporting of accounts and programs, expenses should be reflected in the appropriate account (representing the purpose for which they were incurred). Transfers are intended to move funding, not expenses, so funds should be transferred into an account (to cover expenditures), rather than expenses moved out. There are three primary exceptions to this rule:
Top How to Transfer FundsTransfers can only be done in KFS on a Transfer of Funds e-doc, and only using transfer object codes. The proper transfer object codes to use are determined primarily by the fund and/or sub-fund group codes of the accounts involved in each side of the transfer. It can be confusing! It helps to think about one side of the transfer at a time. If you were looking at only one of the accounts, the proper transfer object code should provide you with useful information on where the funds came from (if the account received funds) or where the funds were sent to (if the account provided the funding) WITHOUT looking at the entire transaction (i.e., both sides of the transfer). Transfer Object Codes Cheat Sheet (XLSX, 17 KB) Top Transferring Funds Within Your College or DivisionTypically, funds that are moved around an individual college or division are within the same fund group. For example, you might need to move funds from a dean's account to a department account, both of which fall within the GN fund group. On occasion, gift funds may be distributed to another department to use (assuming the use complies with donor restrictions), so the transfer occurs between accounts in the RG fund group. A special set of transfer codes is used, always together, for this type of activity. Similar to how all transfers must net to zero on an institutional level, using these object codes enable a college or division to net this activity together (to zero), as it does not represent either resources flowing into or out of the college/division.
Example: The Ivy Room dining facility is sponsoring a special event for seniors. The Class Councils programming board would like to provide $500 towards this event. Both the Ivy Room and the Class Councils are in the same division (Division of Student & Academic Services), and both accounts are in the same fund (GN fund group).
If the transfer is between accounts in different fund groups, regardless of whether the accounts are in the same or different colleges/divisions, then these object codes should not be used. See Other Transfers Used by Colleges and Divisions below. Top Transferring Funds Between Colleges or DivisionsWhen colleges or divisions collaborate with each other to provide multidisciplinary programs, funding is often transferred to support these activities. Generally speaking, the funds use for this type of activity fall within the same fund group. In order to provide a simple way to determine whether the transfers represent additional resources for or use of resources by the college/division, a separate pair of transfer codes is used to distinguish this activity from that described above.
Example: The Johnson Graduate School of Management (JGSM) Career Office is helping to fund a "Careers in Business" symposium sponsored by the Applied Economics and Management (AEM) department in the College of Agriculture and Life Sciences (CALS). Both the Career Office and the AEM accounts are in the same fund (GN fund group), but they are in different colleges: one is in JGSM, and one is in CALS.
If the transfer is between accounts in different fund groups, regardless of whether the accounts are in the same or different colleges/divisions, then these object codes should not be used. See Other Transfers Used by Colleges and Divisions below. Top Funding and Using ReservesReserves are savings accounts used by units to accumulate funds for a future purpose. It is very important for management to be able to determine how much money their organization has been able to "put away" each year, so a series of transfer codes are used to record this specific activity. Usually, object code 7000 (Transfer In - from Current Operating) is used for the credit side (transfer in) of these transactions.
It is just as important for management to know how much of their current year operations have been funded by using accumulated reserves. When reserves are used, the debit (transfer out) in the reserve account would be on object code 8000 (Transfer Out - to Current Operating).
Object code 3059 is also used in reserve accounts as part of the Year-End Closing account reversion process. Top Funds Functioning as Endowment (FFE)In some ways, a fund functioning as endowment (FFE) is similar to a reserve account, except that the funds are invested in the Long-Term Investment Pool (LTIP). It could be compared to investing some of your savings in a Certificate of Deposit (CD) at the bank – the money is invested and earning income; however, the availability of the funds is limited for a period of time (see Investing in the Long-Term Investment Pool for more information). Like reserves, management keeps track of when operating funds are placed into or pulled out of FFEs. Within the FFE, the transfer codes used should indicate that the funds are either going into or coming from an operating account (see Other Transfers Used by Colleges and Divisions below).
Top Transferring Funds between Ithaca Campus and Weill Cornell Medical College (WCMC)Collaboration between departments on the Ithaca Campus and at Weill Cornell Medical College (WCMC) is common. Because WCMC has its own financial system, special transfer codes are used to pass funding through a "due to/due from WCMC" account set up on the Ithaca general ledger (KFS). The two transfer codes below are not used as a pair, so a different transfer code, usually either object code 7000 (Transfer In - from Current Operating) or object code 8000 (Transfer Out - to Current Operating), is needed as the "other side" of the transaction.
Top Other Transfers Used by Colleges and DivisionsThe following transfer codes are used frequently as the "other side" of a special transfer (e.g., to/from reserves, to/from project accounts, etc.).
Some colleges have elected to emphasize the funding of faculty start-up accounts by using the following:
Top Provost TransfersAs part of the new budget model, the following pairs of transfer codes have been set up specifically to record the allocations and charges between the central accounts and the colleges/divisions.
Top Capital Projects and Internal LoansFunding for capital projects may come from a variety of sources. The transfer in codes used in the project account should tell the story of where the funding for the project is coming from.
The debit side of this transfer would be as follows:
Capital projects are sometimes charged an “assessment” (e.g., Transportation Assessment) by a university department. In this scenario, the project would record a transfer out, and Transportation would record the transfer in on the following transfer code:
If a college/division financed a portion of a capital (or other) project with debt (i.e., internal loan), then payments are made during the term of that obligation. These payments are processed as transfer from the college/division to the internal loan account using the following transfer code:
Top Year-End ClosingYear-end closing activities include account reversion, whereby the ending balance of an account reverts to another account, as specified by the college/division. KFS uses a special object code (on both sides) for this transaction.
Top Other Transfers Used by Central OfficesThere are a few other object codes used by DFA or Alumni Affairs & Development (AA&D) to transfer funds between donor-related or invested accounts.
Top How are interfund transfers reported in fund financial statements?INTERFUND TRANSFERS
They should be reported as additions to or deductions from the beginning fund balance for Governmental Funds and as additions to or deductions from contributed capital or as deductions from retained earnings for Proprietary Funds.
Is a transfer out an expense?Transfers are intended to move funding, not expenses, so funds should be transferred into an account (to cover expenditures), rather than expenses moved out.
What are transfer accounts in accounting?General: Transfers are accounting transactions between funds which are neither revenues nor expenditures. Therefore, transfers are in essence a movement of fund balance from one fund to another. The same account code is used for both sides of the transaction (e.g. debit 8452 and credit 8452).
What is an interfund transfer?Interfund transfers are flows of assets between funds without equivalent flows of assets in return and without a requirement for repayment. Interfund transfers are not used to account for interfund loans or borrowing.
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