Division of Diversity and Community Engagement UT Shield

Business Affairs

Business Affairs

for the Division of Diversity and Community Engagement

Fiscal Year-End Resources

OVERVIEW

The University of Texas operates on a 12 month fiscal year which runs from September 1 to August 31.  Budgets and external reporting are all done for this 12 month period. At UT Austin a fiscal year is referenced by the two years it spans.

UT Austin Fiscal Year – the fiscal year starting Sept 1, 2018, is the “18-19” fiscal year.  The fiscal year starting Sept 1, 2019, is the “19-20” fiscal year.

Significant accounting activity takes place as the old fiscal year ends and the new fiscal year begins.

The accounting records for the old fiscal year are adjusted and closed and the accounting records for the new fiscal year are opened as follows:

  1. Annual Financial Report (AFR)  – Accounting and Financial Management prepares the Annual Financial Report (AFR) for UT Austin which is sent to UT System which is then combined with other UT System institutions and is sent to the Texas Comptroller’s Office to be combined with other state agency reports into the Consolidated Annual Financial Report (CAFR) for the State of Texas.
  2. August Close – The last month of the fiscal year, August, must be closed so that any balances that remain can be brought forward into the new fiscal year. If August was not closed, there would be no fixed balance for the Office of Accounting to bring forward. Therefore, August must be closed. It is necessary, however, to keep the fiscal year open so that adjusting entries and closing entries required for reporting purposes can be made. These entries are posted to the 13th month with an 8/31 record date.
  3. Initial Balance Forwards – At the end of the fiscal year, the Office of Accounting closes the month of August so that any remaining balances can be moved to the new fiscal year. The balance forwards completed after closing August are referred to as initial balance forwards. The initial balance forward entries are recorded in September with a 9/1 record date.
  4. 13th Month – The thirteenth month (abbreviated as THR in the Month field in *DEFINE or FRMS) is a virtual month which falls between the last month of the old fiscal year and the first month of the new fiscal year. The Office of Accounting uses it to complete year-end entries for reporting purposes. All 13th month transactions are posted with VJR documents and have an 8/31 record date.
    • Adjusting Entries – The Office of Accounting must make various adjusting entries for reporting purposes. These entries include permanent corrections including object code corrections, account number corrections, entries to clear overdrafts and accrual entries.
    • Accrual Entries – These entries include accounts payable, accounts receivable, prepaid expenses, and deferred revenues. The roll forward process moves these transactions to the year they are related to for reporting purposes.
  5. 14th Month – A virtual “14th Month” is opened in the new fiscal year with Balance Forward entries having a September 1st record date.  The 14th Month is the true beginning of a new fiscal year.
  6. Adjusted Balance Forwards – While the Office of Accounting processes year-end adjusting entries, new fiscal year activity is taking place.
    • In fact, September and October of the new fiscal year will most likely be closed before all prior year entries are completed.
    • Once all adjusting entries have been made, the 13th month is closed and the adjusting entries are brought forward.
    • This set of balance forwards is referred to as adjusted balance forwards.
    • The adjusted balance forward entries are normally recorded in October with a 10/1 record date.

LINKS AND RESOURCES

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