Revenue Recognition Policy

Effective Date:
7/1/95; Revised 7/1/05, Revised 3/1/07

References:
Implementation guidance on GASB Statement 33 provided in the following OSC memorandums:

• State agencies/other component units - Memorandum # SAD 01-33 and attached summary
• College and Universities - Memorandum # SAD 01-58 and attached summary

Policy:
The State considers individual income tax revenues and Medicaid program revenues to be available if collected within 12 months of the end of the current fiscal year. All other revenues are considered available if collected within thirty-one days of the end of the current fiscal year.

Accounting Guidance:
GASB Codification Section N50 provides guidance on the recognition of revenues arising from nonexchange transactions involving financial or capital resources, including taxes; fines and forfeitures; certain grants, entitlements, and similar items; donations; and any subsequent contravention of eligibility requirements or purpose restrictions. In addition, the following recognition rules apply:

Governmental Funds -- Modified Accrual Basis
Revenues are recognized when they become susceptible to accrual - that is, when they become both measurable and available to finance expenditures of the current period. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period (see policy above).

Proprietary Funds and Fiduciary Funds -- Accrual Basis
Revenues are recognized in the accounting period in which they are earned and become objectively measurable.

• Earned - goods or services have been provided
• Measurable - estimable