Assets = Liabilities + Equity*
Note: At IU, equity is the equivalent of fund balance.

The account number identifies a pool of funds assigned to a specific organizational entity for a specific purpose. Accounts are the fundamental building blocks of KFS transactions since one or more of them are always associated with a transaction. Accounts can have unique attributes such as specific start and end dates as with grant accounts or may exist for an unlimited amount of time as with a department's general fund account.

Accounting principles are general rules and guidelines that entities must follow in order to accurately report their financial statements.

Accrual accounting is a method that records revenue when it is earned and records expenses when they are incurred, not when the cash is received. Different than cash accounting, this method provides a more realistic understanding of income and expenses and helps with long term projections.

An entry for an expense or revenue incurred in a period for which no invoice or payment changed hands by the end of that period.

Used to organize and catalog financial data. An account number identifies a specific pool of funds that are set aside for a specific purpose. All accounts at IU are seven digits, unique, and chart specific.

The total of all actual activity for a given balance line of the selected fiscal year. Only transactions that have posted to the General Ledger are included in the Actuals calculation.

The Adjusted Base Budget is defined as the initial July 1 budget load adjusted throughout the year through the use of base budget adjustments. The adjusted base budget is the basis for budget construction for the upcoming fiscal year.

A legal entity operating substantially for the benefit or under the auspices of the university that operates in such a way that it could enter into a foreign source arrangement where part or all of the benefit of that arrangement is intended for the university. Significant Affiliated Organizations to IU include, but are not limited to, the following: Indiana University Foundation and IU Medical Group Foundation.

An accounts receivable aging report is a record that shows the unpaid invoice balances along with the duration for which they've been outstanding.

Funds held by an institution as custodian or fiscal agent for others such as student organizations, individual students, or faculty members. The agency fund is divided between internal and external fund recording.

The As of Date is the date specified in the parameters and shows the cut-off date of the information provided.

Assets are defined as any resource of value that can be used to generate future economic value.

Auxiliary Enterprise Funds furnish goods or services either internally or externally and charge a fee directly related to the cost of the goods or services. The auxiliary enterprise fund at IU is broken out between: Auxiliary Funds & Service Funds.

The Auxiliary Fund is an enterprise that furnishes goods or services to students, faculty, or staff and charges a fee directly related to, although not necessarily equal to, the cost of the goods or services. This means that the entity is self-supporting.

An Accrual Voucher is a KFS document used to post accrual, adjustment, and recode entries.

A balance sheet, also known as the Statement of Financial Position, is a financial statement that reflects the overall financial position of an organization at a specific period in time.

A plan for how resources will be used. IU uses both current and base budgets.

The foundation amount that is created annually for, and guaranteed by, each unit by the unit's responsibility center or chart. Base budgets are based on historical performance and future plans and designate an ongoing fiscal commitment.

The compound annual growth rate (CAGR) is the average rate of return a fund has earned over the preceding defined number of years.

Cash is money in coins or notes, as distinct from checks, money orders, or credit.

Accounting method which records revenues and expenses only when monies are exchanged.

Cash equivalents are short-term assets that are easily and readily converted into a known amount of cash.

A cash flow statement, also known as Statement of Cash Flows, is a financial statement that summarizes the amount of cash and cash equivalent entering and leaving an entity.

Cash receipt is the collection of money (currency, coins, checks). A company's receipts refers to the cash that the company received.

Sources of funds include federal grants and contracts, state grants, and special appropriations, and gifts and grants from private sources. Restricted C&G funds should not be recorded in this fund group until the terms of the agreement under which they were given to the university have been met. C&G funds are subject to Uniform Guidance.

The Clearing & Rotating Fund Group is specific to IU and is used to record interim accounts that should be closed out (net to zero) at the end of the fiscal period. To post to this fund group, please reach out directly to the UCO cash accounting team prior to posting entries.

The Construction Fund is a subset of the plant funds and used for the acquisition of plant assets.

A chart of accounts (COA) is a financial organizational tool that provides a complete listing of every account in the general ledger of a company broken down into subcategories. The chart of accounts can be expanded and tailored to reflect the operations of the company.

Constituent Reporting Unit (CRU) a defined segment (organization or grouping of organizations) within Indiana University that have revenues, expenses, or net assets over a predetermined threshold as defined by the Office of the University Controller's closing procedures.

The continuation account is the account that accepts transactions being processed in KFS on the account after the account expiration date.

The continuation chart of accounts code is the chart that accepts transactions being processed in KFS on the account after the account expiration date.

A contra asset object code is an offset to another asset code (i.e. accounts receivable or capital assets) and typically acts as a reserve to reduce the associated asset code.

Any agreement for the acquisition by purchase, lease or barter of property or services by the foreign source, for the direct benefit or use of either of the parties. This includes all revenue generating contracts, not contracts where IU incurs the expense.

A credit is an accounting entry that either increases a liability or equity account, or decreases an asset or expense account.

A current asset is an asset that is expected to be sold or consumed within twelve months.

The Current Budget is loaded along with the base budget load on July 1 and adjustments through the use of current budget adjustments are reflected for the current year only.

A current liability is an obligation that is expected to be settled within twelve months.

A debit is an accounting entry that either increases an asset or expense account, or decreases a liability or equity account.

A deferral often refers to an amount that was paid or received, but the amount cannot be reported on the current income statement since it will be an expense or revenue of a future accounting period. In other words, the future amount is deferred to a balance sheet account until a later accounting period when it will be moved to the income statement.

The Designated Fund is the use of unrestricted funds for institutional designated purposes such as specific activity/project. Most designated funds are now budgeted and most have a multi-year life. The designated fund includes several major sub-fund such as continuing education, public services, etc.

University administrative offices with significant activities or responsibilities that may impact foreign gift reporting compliance. DRUs include, but are not limited to, Bursar, Office of Research Administration, Indiana University Foundation, and Kelley School of Business.

When available, allows users to further investigate a specific financial statement balance through linking of additional detailed reports and KFS. Drill down detail can go as far as the document reference in KFS, provided the user continues to click on the desired linked balance.

A main concept of government accounting, an encumbrance is a restriction placed on the use of funds to ensure there are enough funds for future expenses/obligations such as salary, loan payments, etc.

Endowment Funds are funds with respect to which donors or other outside agencies have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity and invested for the purpose of producing present and future income which may either be expended or added to principal.

Users who can serve as fiscal officers, account manager, account supervisor or allowed to be delegates as exception to policy.

Expenses are defined as the cost incurred to do business or the outflow of resources associated with the general operations of an entity.

This fund group is in direct relationship with the university mission and acts as reimbursement to the university for use of university property or service. This fund is managed by individual campuses and fiscal officers.

External Encumbrances are reservation of funds to cover obligations arising from external activities such as when a purchase order is approved to reserve funds payable to a vendor. Encumbrances project future expenditures and provide fiscal officers with a more accurate representation of an accounts available balance.

The organization responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations in the United States.

One of three individuals assigned responsibility to a financial account. The Fiscal Officer has daily oversight over how an account's funds as spent and managed.

A fiscal period at Indiana University is broken out into 12 separate periods based on months in the calendar year. Period one is equivalent to July during the fiscal year.

A fiscal year at Indiana University spans from July 1st through June 30th of the subsequent calendar year. The last day of the fiscal year is June 30th.

Fund accounting is an accounting and reporting system commonly employed by independent colleges and universities to keep track of resources whose use is limited by donors, granting agencies, law, other outside individuals or entities or by governing boards. A fund is maintained for each specific purpose.

(A) A foreign government, including any agency of a foreign government; (B) a legal entity, governmental or otherwise, created solely under the laws of a foreign state or states; (C) an individual who is not a citizen or a national of the United States or a trust territory or protectorate thereof; and (D) an agent, including a subsidiary or affiliate of a foreign legal entity, acting on behalf of a foreign source.

Fund balance is essentially the difference between assets and liabilities. In general, it is the balance remaining after the assets have been used to satisfy the outstanding liabilities.

IU accounts are maintained in accordance with the principles of fund accounting, in which resources for various purposes are classified into funds in accordance with the activities or objectives specified. Fund groups are divided into Sub-Fund Groups to further classify activities and objectives.

The organization responsible for establishing accounting and financial reporting standards for state and local governments and those entities that are funded by state and local government.

General Funds are primarily unrestricted funds of the university. The general fund is budgeted annually and the main sources of funds are student fees and state appropriations with matching expenditures.

The voluntary transfer of money or property by a foreign source made without consideration.

The General Ledger (GL) acts as a repository of all financial and budget information. The GL contains all the financial transactions that are created via Kuali Financials documents, fed in from external systems or created during batch processing.

A functional expense classification that groups expenses according to the purpose for which the costs are incurred. The classifications explain why the expense was incurred rather than what was purchased; they help donors, granting agencies, and creditors to understand the various mission-related activities at IU and their relative importance.

The historical cost principle is used primarily for consistency and reliability among financial statements. According to the historical cost principle, an entity must report and account for items at their original cost when the asset was purchased. The amount reported should include all costs necessary to acquire the asset and prepare it for use including delivery and handling costs, site preparation fees, and installation costs.

An income statement, also known as the Statement of Revenues, Expenses, and Changes in Net Position, is a financial statement that summarizes the revenue streams, expense categories, and overall profitability of an entity.

The Internal Agency Fund acts as the fiscal agent or trustee for the university. For financial reporting purposes, this fund group balance is reported as unrestricted at fiscal year-end. Common uses of this fund include withholdings for taxes for employees and sales tax. This fund group is managed internally by UCO.

Internal Encumbrances are a reservation of funds to cover obligations arising from internal activities that are chargeable to, but not yet paid from, a specific account (i.e. salary commitments, faculty travel, etc). Encumbrances project future expenditures and provide fiscal officers with a more accurate representation of an accounts available balance.

The Investment in Plant Fund is a subset of the Plant Fund whose funds used for the purchase of capital assets. The fund is also used to record bonds and notes payable.

Reporting tool for IU's institutional data, including transaction information.

Journal entries are records of business transactions. A business transaction is the exchange of goods or services for a form of payment. A journal entry is used to record each transaction and include more information about the transaction such as date, amount, description of the entry, and a unique reference number, often called a journal entry number.

A liability is a debt or obligation that arises from past events.

Life Estate Funds are funds contributed to an institution subject to the requirement that the institution periodically pay the income earned to designated beneficiaries.

Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. Cash is the most liquid of assets while tangible items are less liquid.

The Loan Funds consist of loans to students, faculty, or staff, and of resources available for such purposes. Many are temporary and require repayment of principal & interest while some specify forgiveness of repayment under certain conditions. These funds are derived from private and governmental gifts and grants, federal borrowing and unrestricted allocations. Interest revenue is returned to this fund as an increase to the available fund balance. Examples of loans included in the loan fund include Federal Perkins Loans, health professional loans, nursing loans and institutional loans.

The matching principle is used to accurately record expenses within an accounting period. Under the matching principle, expenses and revenues that are related to one another should be recorded in the same period.

Highlights any variance that meets the specified materiality threshold specifically for the income statement. Materiality is set at 10% of the associated revenue stream.

Monthly budgets allow departments to spread their annual budget into 12 different buckets. This is important when entities have revenue and expense lines that are not earned or incurred evenly over the 12 months of the fiscal year.

Non-current assets are long-term assets that the organization expects to hold for longer than twelve months and cannot be readily converted into cash.

A non-current liability is an obligation resulting from a previous event that is not due within one year. Non-current liabilities are also known as long-term liabilities.

A non-operating expense is a business expense that is not related to an organization’s core operations. Examples include, but are not limited to, interest expense and inventory write-offs.

A non-operating revenue is a business revenue that is not related to an organization's core operations. Examples include, but are not limited to, profits from investments and sale of assets.

An isolated transaction that will not recur on a regular basis.

A normal balance is the side of the T account where the balance is normally found. When an amount is accounted for on its normal balance side, it increases that account. On the contrary, when an amount is accounted on the opposite side of its normal balance, it decreases that amount.

An object code is used to organize and catalog financial data. An object code classifies a financial transaction as income, expense, asset, liability, or fund balance.

An object consolidation is a grouping of object levels for reporting purposes.

An object level is a grouping of object codes for reporting purposes.

Operating revenues and expenses are defined as amounts associated with day-to-day operations of a business. These amounts are typically used to analyze the financial health of the organization and determine future cash needs.

A collection of accounts and/or other organizations. Together, organizations form a hierarchy, starting with the university as a whole at the top and moving down through campuses, schools, and departments. The organization hierarchy can be used for reporting and KFS document routing.

The country to which a gift is attributable, the country of citizenship, or if unknown, the principal residence for a foreign source who is a natural person, and the country of incorporation, or if unknown, the principal place of business, for a foreign source which is a legal entity.

Other Funds incorporates any other funding that does not fall in the traditional classifications. This is rarely used and users are discouraged from using this fund.

Other Restricted Funds are expendable for operating purposes, but restricted by donors or other outside agencies as to the specific purpose for which they may be expended. Commonly used other restricted funds include fellowships, scholarships and special state appropriations.

An unofficial encumbrance, Pre-Encumbrances are used to reserve funds in anticipation of an official encumbrance created with a Purchase Order, Travel Authorization or salary transaction.

Prepaid expenses are future expenses that have been paid in advance. In other words, prepaid expenses are costs that have been paid but are not yet used up or have not yet expired.

A Proprietary Fund is used in governmental accounting to account for business-type activities that are financed in whole or in part by fees charged to external parties for goods or services.

Quasi Endowment Funds are funds which the governing board of an institution or university management, rather than a donor or other outside agencies, have determined are to be retained and invested.

An attribute assigned to organizations that represent schools or major administrative units to facilitate the responsibility center management budgeting model.

Furnishes goods or services to another Indiana University department for the convenience of the university and charges a fee directly related to providing the goods or services, and not more than the allowable costs.

The review of operating reports monthly to ensure that the revenue and expenditures posted to the account are those that were approved by the Fiscal Officer, or their delegate, and that they are allowable and appropriate.

Value of money or property received, or expected to be received at a future date, as a result of a gift from, or contract entered into with, a foreign source. Individuals paying tuition, room and board, and fees related to a student's education are not generally considered reportable items, unless the individual is paying for multiple students and acting as an agent of a foreign source, because they would not meet the threshold.

Derived from indirect cost recovery, educational and administrative allowances, unrestricted gifts, and revenues from intellectual property (patents, copyrights, royalties).

The revenue recognition principle requires that revenues are recognized in the period when realized and earned-not necessarily when cash is received. The revenue recognition principle is used to ensure consistency when revenue is recorded on an entity's income statement. This principle is typically intended to eliminate and mitigate against any overstatements in revenue.

Riley Hospital Endowment Funds contributed to IU are directly related to the Riley Hospital. Similar to quasi endowment funds, interest income is reinvested at year-end.

Transactions that happen on a recurring basis.

The Renewal and Replacement Fund is a subset of the Plant Fund whose funds are set aside for replacement of renewable property. An example of use of replacement funds is the purchase of computer replacement.

The Retirement of Indebtedness Fund is a subset of the plant funds and used for long term capital financing and debt.

Service Funds is an enterprise that furnishes goods or services to other internal university departments and charges a fee directly related to, and equal to, the cost of the goods or services. This means that the entity is self-supporting, but is not allowed to make a profit.

Financial instruments, such as money market funds, certificates of deposit, that can easily be converted to cash usually within one year or less.

An agreement, contract or grant documentation, analysis conducted, calculations completed, emails, memos, receipts, etc. that supports the transaction.

A split-interest agreement is when more than one beneficiary is involved. This means, a donor is providing a gift that benefits a government and someone else (typically the donor, their spouse, or their children), so the benefit of the gift is shared.

State appropriations are appropriations made to the university by the State Legislature. Income fund deposits are from tuition and other receipts deposited into the income fund for operating purposes.

A tool used to help identify the ending balance of a given asset, liability, revenue or expense. The left side is for debits and the right side is for credits.

Uniform Guidance is a set of authoritative rules and regulations about federal grants from the Office of Management and Budget (OMB).

Unearned revenue is a liability account that reports amounts received in advance of providing goods or services. When the goods or services are provided, this account balance is decreased and a revenue account is increased.

US Generally Accepted Accounting Principles (US GAAP) is the combination of authoritative standards (requirements) and the commonly accepted ways of recording and reporting accounting information.

The Work Study Agency Fund is used to track money received for federal work study and is managed internally by UCO payroll.

The university has 01* accounts that may need to be excluded in certain circumstances. These accounts are associated with contract and grant beginning balance amounts. These accounts reside in the sub-fund group: Other Designated: IU Initiative (SDCI).

These 23* accounts are used to record adjusting entries to the balance sheet for internal activity that is consolidated at the university-wide financial statement level. The university has eight designated fund accounts (one for each campus) that are used to record the university consolidation entries in preparation for the annual financial audit. Depending on the type of reporting, it is not uncommon to exclude the following accounts for internal reporting purposes.

BL 2320013
EA 2367013
IN 2371013
FW 2362013
KO 2363013
NW 2360013
SB 2355013
SE 2350013
UA 2310013

The two-letter chart code associated with the account.

Object codes are detailed, four digit identifiers for Income, Expense, Asset, Liability and Fund Balances. They are unique to a chart of account.

Object level codes, or levels, are less specific than object codes. Levels are made up of similarly grouped object codes. See the Understanding Reporting Levels chart for more details.

The organizational hierarchy presents the financial data based on organization code and provides a high level review of the data at a more consolidated level. In many cases an organization reports directly to another organization. By selecting the organization hierarchy, users will be able to see all data from the selected organization plus any organizations that report to the selected organization.

Sub-object codes allow a department to specify a more detailed breakdown of an object code.

Fund Groups are a way to organize accounts based on shared activity or objective, e.g. general fund accounts, contract & grant funds, etc.

The organization code is unique within the chart to which it belongs and identifies the organization the report is being run for.

Code assigned to organizations that represent schools or major administrative units to facilitate the responsibility center management budgeting model.

An account within an account. Cannot be used without entering the Account number above.

Optional Parameter to limit report to a specific Sub Fund Group.

Classifies whether the user wants to run the report for stale asset balances only, stale liability balances only, or for both.

Hides the column that describes whether the account transaction is classified as an asset or liability when checked.

Hides the detailed identifiers for Income, Expense, Asset, Liability and Fund Balances. See consolidation hierarchy.

Hides the fund group code column from the stale balances report when checked.

Hides the sub-fund group code column from the stale balances report when checked.

Determines how many years back the user wants the report to generate. Options are 3, 5 and 10 Years.

Once the report has finished generating in the background, a pop-up box will appear on the screen allowing you to access it. If the report takes too long to generate, the system will automatically send it to your email.

Selects whether the report is generated in Excel or html format.

Similarly grouped object levels used for reporting purposes.

Identifies the document initiating a transaction.

Identifies different types of transactions (i.e. Current Budget, Actuals, Encumbrances, etc).

A unique number to identify each document in KFS.

Provides Balance Sheet information on a comparative basis based on fiscal periods. Users can choose between

Current Year Only - Information only related to the fiscal year selected.
Current Year and July 1 Balance - all financial data through the current fiscal year selected in addition to beginning balances for the fiscal year. Information is presented into two separate columns on the report.
Current Year and Prior Year - Information for the fiscal period selected and the prior year. Information is presented into two separate columns on the report.
Current Year, Prior Year and July 1 Balance - Information for the fiscal year selected in addition to the prior year and the beginning balances for the fiscal year. Recommended in particular when also running a Cash Flow Statement because the July 1 balance on the balance sheet is what tie to the beginning balance on the Cash Flow Statement.

Check/Uncheck- provides information at consolidated level line item (i.e. non-student accounts receivable is included in the accounts receivable line item).

Check/Uncheck to Include or exclude a Balance Sheet report in a separate tab.

This parameter specifies which columns the users wants presented in the report related to the income statement:

Current Year only includes only the current year activity column.
Current Year and Budget includes the current year activity and Budget columns for the same period.
Current Year and Prior Year includes current and prior year activity columns for the same period.
Current Year, Prior Year and Budget includes current year, prior year, and budget columns for the same period.

Users are encouraged to use the current year, prior year and budget for a more comprehensive report.

Check/Uncheck to allow users to review income statement at the object code i.e. 4088 non-employee travel.

Check/Uncheck to allow users to review the cash flow statement at the object level (i.e. grant revenue or compensation, etc).

Check/Uncheck function includes or excludes the income statement executive summary in a separate tab. An executive summary presents financial data at the consolidated level, broken out between four main categories: revenue, cost of goods sold (cogs), expenses and net income. This provides a high level review of the financials.

A group of similar object codes consolidated for external reporting.

Identifies the descriptive name of the object code.

Used to limit report to one or more specific object levels. An object level is made up of a combination of related object codes.

Designation assigned to similar groups of object codes e.g. AR - Accounts Receivable, CA - Cash, DR - Depreciation etc.

Identifies object code as income, expense, asset, liability or fund balance.

Includes a column highlighting the specific sub-object code that the report refers to. This is useful when an entity budgets at the sub-object code level.

The subtotal option is used to show subtotals within the designated report at different levels including: No subtotal by Object Code, Subtotal like Income Statement and Subtotal by Classification by Object Code.

Check/Uncheck - this allows users to review the cash flow statement at the object code (i.e. 4088 non-employee travel).

Check/Uncheck - this allows users to review the cash flow statement at the object level (i.e. accounts receivable, accounts payable, etc).

Prompts the system to generate the stale balance report.

This function allows the user to name and save the parameters for future use. In the future, the user only selects the saved name and ensures the fiscal year, period and account are correct, then run report.

Identifies the date a transaction has been posted to the general ledger.