As year-end approaches, we would like to kindly direct your attention to a number of communications regarding various requests and deadlines for providing information that we require in completion of the University’s financial statements. Also, we would like to ask that you please refer to our year-end deadline schedule.
These communications can be found on Financial Services’ website under the Financial Services Timelines and Cut-Offs section.
We ask that you please review them in detail at your earliest convenience and forward these on as appropriate.
If you have any questions or concerns, please contact us at extension 32050 or via email email@example.com
We thank you in advance for your assistance.
Queen's Financial Services
Queen’s year end is a process which requires all revenue and expenses pertaining to the current year to be recorded in the University General Ledger by April 30th. All amounts due to and from the University must be recorded at that point in time. In order to ensure accurate reporting, cooperation between Financial Services and business officers is essential.
For the fiscal year ended April 30, 2015 a materiality threshold of $250,000 has been set. What this means, is if total accrued liabilities, total deferred revenue or total unrecorded receivables is equal to or greater than $250,000, year-end adjustments must be entered in the general ledger. Financial Services asks for all business officers to communicate any accrued liabilities, deferred revenue, or unrecorded receivables they are aware of to Financial Services. This is critical to ensuring the accuracy of the Queen’s financial statements.
Please send copies of documentation for any accruals or deferrals to Samantha Emmons (firstname.lastname@example.org) no later than May 4th, 2015. Journal entries for accruals and deferrals will be recorded centrally as of April 30, 2015, unless otherwise requested by the business officer. If you are not aware of any accruals or deferrals for your area of responsibility, we kindly ask that you confirm this fact with Samantha by the same date.
If you have any questions about the accounts, please see the list of contacts below. Definitions are provided below for guidance.
Accrued Liabilities: Leisha Bouma, Extension: 79563
Deferred Revenue: Edward Nkole, Extension: 75007
Unrecorded Receivables: Michele Vignola, Extension: 75523
Accrued liabilities: expenses incurred by the business before April 30th, but the invoice has not been entered by Financial Services in April. Please refer to our year-end reporting schedule for important year-end cut off dates.
Deferred Revenue: revenue has been received and deposited before April 30th but pertains to an event or program after April 30th. Please note that this does not relate to any fees or tuition revenue that would be processed through the Student Financial System – a separate process is run through Financial Services to account for these deferrals.
Unrecorded Receivables: work or service that has been performed by Queen’s before April 30th, but has not been invoiced to a party external to Queen’s until after April 30th. In other words, revenue is expected to be received after year end which relates to the work or service provided before year end. This is not relevant for sales internal to the University.
Thank you for your assistance in this matter.
Queen's Financial Services
In preparation for the year-end audit, Financial Services requires information on all new lease arrangements greater than $250,000 arranged during the 2015 fiscal year with a term greater than one year and that were not brokered in collaboration with Strategic Procurement Services. This pertains to leases entered into between Queen’s and external companies. This information is required for both Operating and Capital Leases. By default, if a lease is not classified as Capital it is Operating.
To assist in determining if you have entered into a Capital Lease, the following definition of a Capital Lease is provided:
A Capital Lease is a lease that transfers substantially all of the benefits and risks of ownership related to the leased property from the lessor to the lessee. From the point of view of a lessee, a lease would normally transfer substantially all of the benefits and risks of ownership to the lessee when, at the inception of the lease, one or more of the following conditions are present:
(a) There is reasonable assurance that the lessee will obtain ownership of the leased property by the end of the lease term. Reasonable assurance that the lessee will obtain ownership of the leased property is present when the terms of the lease result in ownership being transferred to the lessee by the end of the lease term or when the lease provides for a bargain purchase option.
(b) The lease term is of such a duration that the lessee will receive substantially all of the economic benefits expected to be derived from the use of the leased property over its life span. Although the lease term may not be equal to the economic life of the leased property in terms of years, the lessee is normally expected to receive substantially all of the economic benefits to be derived from the leased property when the lease term is equal to a major portion (usually 75 percent or more) of the economic life of the leased property. This is due to the fact that new equipment, reflecting later technology and in prime condition, may be assumed to be more efficient than old equipment that has been subject to obsolescence and wear.
(c) The lessor is assured of recovering the investment in the leased property and of earning a return on the investment as a result of the lease agreement. This condition exists if the present value, at the beginning of the lease term, of the minimum lease payments, excluding any portion thereof relating to executory costs, is equal to substantially all (usually 90 percent or more) of the fair value of the leased property at the inception of the lease. In determining the present value, the discount rate used by the lessee is the lower of the lessee's rate for incremental borrowing and the interest rate implicit in the lease, if known.
Please respond by end of day May 4th, 2015 as to whether or not your business area has entered into a capital or operating lease. If you have entered into a new lease that was not brokered with Strategic Procurement Services, please complete the Lease Information Template, which will capture the information required to aid in the formulation of note disclosure for Queen’s financial statements.
If have any questions or would like to discuss further, please contact Daniel Epp at extension 75802 or email email@example.com
Thank you in advance for your assistance with this matter.
Queen's Financial Services