Transcript WVU Department of Intercollegiate Athletics
Scholarship Discounts and Allowances
• NACUBO Advisory Report 2000-05 – Accounting
and Reporting Scholarship Discounts and Allowances to Tuition and Other Fee Revenues by Public Institutions of Higher Education
– Available on NACUBO’s website at
http://www.nacubo.org/ under Accounting/Advisory Reports
– Preferred industry practice – GASB Statement No. 34,
and Management’s Discussion and Analysis – for State and Local Governments, Basic Financial Statements – requires that revenues be reported net of discounts and allowances
• Applies to tuition and fees, housing
and meal plans
• Classified as a contra-revenue – Reduces tuition and fee and auxiliary
revenue
• Also reduces scholarship and
fellowship expense
• What is or is not revenue – Amounts received to satisfy student
tuition and fees will be reported as revenue only once (e.g., student fees, gifts, federal grants and contracts)
– Only amounts actually received by
students and third party payers to satisfy tuition and fees and room and board payments will be reported as tuition and fee revenue and room and board revenue
• Institutional resources provided to
students as financial aid will be recorded as scholarship allowances in amounts up to and equal to amounts owed by the students to the institution
Aid Exceeds Charges
• When the amount of institutional aid
awarded exceeds the tuition and fees, housing and meals provided by or procured by the institution, the excess of aid should be treated as an expense (scholarships and fellowships)
Elimination of Double Counting
• The historical practice of double
counting revenue was effectively eliminated with GASB No. 34 and 35
Service Related Waivers
• Waivers provided to graduate
assistants
• Tuition and fee remission given in
exchange for services
• Not reported as scholarship discounts
and allowances
Third Party Payer
• Payments made by third party payers
are not gift or grant revenue and are not scholarship allowances
• Purpose is to pay student’s tuition and
fees
Definition
• A scholarship allowance is defined as
the difference between the stated charge for goods and services provided by the institution and the amount that is billed to the student and/or third parties making payments on behalf of the student
• When considering what is, or is not,
revenue, the institution’s published rate structure must be considered
– A discounted, published rate is not
considered a scholarship allowance
Bulk Sales
• For bulk sales of educational services,
the fixed price is separately negotiated
– Not based on number of students • Not considered a scholarship
allowance
• Bulk sale amount reported as tuition
and fees as long as revenue is equal to amount actually received
• Pell Grant Award
Debit Cash Credit Federal Pell Grants To record financial aid received by external source Debit Scholarships and Fellowships Credit Cash To record student request of partial payment of Pell award Debit Scholarship Allowance Credit Accounts Receivable – Students To record Pell award applied to student’s account Example #1 $3,000 $3,000 $1,000 $1,000 $2,000 $2,000
Example #2
• Third Party Contract
Debit Cash $5,000 Credit Sales and Services of Educational Activities $5,000 To record funding received from external party Debit Accounts Receivable – Students Credit Tuition and Fees $5,000 $5,000 To record charges to student’s account Debit Scholarships and Fellowships Credit Accounts Receivable – Students To record third party payment applied to student’s account $5,000 $5,000 INCORRECT!!!!
Example #2 (continued)
• Third Party Contract
Debit Accounts Receivable – Students Credit Tuition and Fees To record charges to student’s account Debit Cash Credit Accounts Receivable – Students To record third party payment applied to student’s account CORRECT!!!!
$5,000 $5,000 $5,000 $5,000
Alternate Method
• Case-by-case approach too
cumbersome for most institutions
• Institutions may use the alternate
method to determine that portion of applicable financial aid support to be applied as scholarship allowances and scholarship and fellowship expenses
Alternate Method
• To use the alternate method,
institutions calculate categories of resources that influence financial aid and their amounts
• Amounts should be available from
Banner
Alternate Method Does your institution calculate Scholarship Discounts and Allowances on a case by case basis OR by the alternate method?
Alternate Method
• Allocate scholarship allowance
between tuition and fees and auxiliary fee revenue
– Based on total of tuition and fees and
auxiliary fees
Alternate Method
• Journal Entry:
Debit Scholarship Allowance – Tuition and Fees (a contra revenue account) Debit Scholarship Allowance – Auxiliary Fees (a contra revenue account) Credit Scholarship and Fellowship Expense
Contact Information Kathy Day E-Mail: [email protected]
Phone: (304) 293-8766 Patty Eckels E-Mail: [email protected]
Phone: (304) 293-8886