Account Negative Balance Report

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Prerequisites

Prior to reading the instructions on the Account Negative Balances Report, it is beneficial to review the following sections of the IU Accounting Standards Book to gain foundational information along with report requirements and best practices:

  1. Accounting Fundamentals Standards Section
  2. Chart of Accounts and General Ledger Standards Section
  3. Financial Statements Accounting Standards Section

Overview

The Account Negative Balance Report was introduced to help locate and investigate negative asset and liability balances within financial statements. Negative balance is an important process because it helps fiscal officers and users of the financial statement pinpoint and isolate issues on the balance sheet and income statement. Without reviewing for negative balances, both the income statement and the balance sheet may include balances that misrepresent the overall financial position of the entity. Reviewing for negative balances also assists entities to identify potential issues such as negative cash flows, non-collection on receivables, etc. Negative balance(s) need to be investigated and adjusted to ensure assets and liabilities are properly and accurately reported on the balance sheet according to Generally Accepted Accounting Principles (GAAP).

An asset is expected to be a debit balance and a liability is expected to be a credit balance within financial statements unless it is an allowance code. Typically an allowance object code has a credit balance that offsets a corresponding asset or liability account. For example, an allowance for doubtful accounts acts to reduce the receivable balance for outstanding amounts that IU expects not to collect during the fiscal year. This balance is typically shown at net (the combination of both balances) within the University’s financial statements. See Accounting for Revenue Section – Write-offs and Collections for further details.


How does the Report Determine a Negative Balance

The Account Negative Balance Report is dependent on one condition:

  1. The present balance (Year 0: Actual Thru Present) must be negative for either an asset or liability, as highlighted in the screenshot below.

Screenshot of report highlighting ACTUAL THRU Present column

Once this condition is met, the report generates a row showing the details related to the transaction. The report can display negative balance information going back 3, 5 or 10 years. By selecting 5 or 10 years of information, you can quickly pin-point the origin of the balances. The more often these balances are checked and corrected, the shorter the duration that needs to be selected.


Running the Report

Define the search parameters to return results relevant to your organization or to a specific account. The search parameters available in the Account Negative Balance Report are divided into three parameter types: chart of account report parameters, report specific parameters and display parameters.

If there are questions related to running the report, requirements or reviewing results, please contact your (RC) fiscal officer or campus office. Each campus may have individual specific requirements related to the Account Negative Balance Report, so be sure to reach out to the related campus office or fiscal officer prior to quarter closings.

General Notes: Do not include any special characters other than approved wildcards in any of the below parameters. Additionally, do not run reports by campus as it will take up valuable computing services.

Click Save Parameter Settings to save your parameters for future use of this report. For instructions, review the Saving Parameter Set portion of the Controller's Office Reporting Tools page to learn how.