Prepaid Expenses: Amounts that are paid in this fiscal year for goods or services to be provided in the next fiscal year should be recognized as prepaid expenses. Common examples include maintenance contracts, rent of building space and insurance premiums.
Deferred Charges: A long-term category of prepaid expense that will benefit future periods, normally greater than 12 months.
Each department is required to provide a Cover Memo along with supporting schedules and other documentation to report the department’s Deferred Charges and Prepaid Expenses as of June 30, 2023 to the Office of Budget & Finance. Please refer to the reminder schedule for due date(s). The documents listed below are required for each Deferred Charges fund maintained by the department. If the department does not have a Deferred Charges account but needs one to be established, contact the Melissa Johnson firstname.lastname@example.org to request a new account. Otherwise the expense will be posted to the departmental expense cost center.
Deferred Charges/Prepaid Expenses Reporting Package (click to open file):
- The Cover Memo should be completed for each Deferred Charges fund. If there was no activity and/or the fund balance is zero, check the “No Activity and/or Zero Balance” box, and identify the Contact Person. The department head must sign the cover memo to attest to the accuracy of the balances, including zero balances. An e-signature is fine; otherwise print, sign and attach cover memo as pdf document. (Required).
- Schedule 1: Amounts that have been prepaid to vendors for future services. If no activity, complete Section B only when there is an A fund.
Schedule 1 is required for each active Deferred Charges fund at year-end.
- Deferred Charges/Prepaid Expenses Template: Use this template to record the journal entry per the instructions included in the spreadsheet.
A template is required for each Deferred Charges fund to be adjusted at year-end.
Return completed reporting package as an excel file and other supporting documents as a pdf, via email, to the Pam Arrowood email@example.com by the due date.
#1 – No Activity and/or Zero Balance