Accruals

Title:	Accruals
Publication date:	4/14/2023
Effective date:	4/14/2023

BRIEF

Policy Summary

This policy describes the requirements for accounting for accrued liabilities at Lawrence Berkeley National Laboratory (Berkeley Lab) to ensure adherence to DOE liability accounting requirements.

Who Should Read This Policy

This policy applies to all employees who establish, monitor, or report on expenses to be accrued for goods and services received at Berkeley Lab.

To Read the Full Policy, Go To:

The POLICY tab on this wiki page

Contact Information

General Accounting Manager

Title:	Accruals
Publication date:	4/14/2023
Effective date:	4/14/2023

POLICY

A. Purpose

This policy describes the requirements for accounting for accrued liabilities at Lawrence Berkeley National Laboratory (Berkeley Lab) to ensure adherence to DOE liability accounting requirements.

B. Persons Affected

This policy applies to all employees who establish, monitor, or report on expenses to be accrued for goods and services received at Berkeley Lab.

C. Exceptions

Not applicable

D. Policy Statement

Berkeley Lab accounts for accrued liabilities in compliance with the DOE Management Handbook, Chapter 11.

An accrual is an accounting transaction to record costs in Berkeley Lab's financial management system for labor, acquisitions, travel, construction in progress where the benefit is received (goods received, services performed) during the current fiscal period, but for which an invoice has not been received / processed in the system.

Types of Accruals

The following table lists the primary categories of accruals and the related frequency:

Initiated by the Resource Analyst and processed by Controller’s Office staff

Accrual Category	Description	Frequency	Performed by
Labor Cost Accrual	Costs related to labor for the number of days between last pay date and end of the month	Month end	System generated
Receipt Accrual	Goods procured through Berkeley Lab's acquisition channels when goods have been received during the fiscal period, and related invoices have not been received nor processed	Month end	System generated
Unposted Voucher Accrual	Goods and services procured through Berkeley Lab's acquisition channels when invoice(s) for goods/services has/have been received and entered into Berkeley Lab's Accounts Payable system during the fiscal period but have not been posted (i.e., invoices to be certified, invoices in match exception)	Month end	Controller's Office staff
Division Accrual-Services	Services procured through Berkeley Lab's acquisition channels when services have been performed during the fiscal period, and related vendor invoices have not been received nor processed, subject to materiality considerations	Month end	Resource Analyst
Division Accrual-Goods and/or accrual adjustments	Goods procured through Berkeley Lab’s acquisition channels when goods have been received during the fiscal period and related vendor invoices have not been received after the receiving cut off (especially during the year end close) and related vendor invoices have not been received nor processed	Year-end, although monthly accruals can be made when certain conditions are met (see below)	Initiated by the Resource Analyst and processed by Controller's Office staff
Travel Accrual	Outstanding airfare for reservations placed through the corporate travel agent and related lodging and meals (per diem) for travel completed during the fiscal period	Year-end	Controller's Office staff
Division Accrual-Others	Accruals not covered under any of the categories listed (e.g. pending expense reimbursements, tuition costs), subject to materiality thresholds	Year-end, although monthly accruals can be made when certain conditions are met (see below)	Initiated by the Resource Analyst and processed by Controller's Office staff

Note: Terms of "year-end" and "month end" refer to the fiscal-period end, not the calendar-month end.

All categories of division accruals are subject to materiality considerations. A transaction is considered material if there is substantial likelihood that omission of the accrual would affect or influence financial management decisions (e.g., understatement of costs)

Other Division accruals are predominantly a year-end activity except in the following Strategic Partnership Projects (SPP) instances:

The period of performance is expiring, or
An award related to a SPP Project that includes limitations on costs by fiscal year and cost element (e.g., limitation on travel costs to those only incurred before a specific date).

Documentation Requirements

Accrual transactions must have appropriate supporting documentation. Note: Automated system accruals such as bi-weekly labor and receipt accruals are supported by system transactions.

For division accruals, documentation will include:

A detail of the amount accrued
An explanation of how the amount was determined
Identification of who provided information for the accrual
Supplier documentation, if available
Proper approval by an individual with designated financial approver authority (resource adjustment/accrual approval authority).

E. Roles and Responsibilities

Role	Responsibility
Division: Individual Requesting Accrual	Once the need for an accrual is identified, makes a timely request to the Resource Analyst to initiate an accrual transaction.
OCFO Accrual Preparer / Resource Analyst	Is knowledgeable about accrual requirements and policy and is proficient in using Berkeley Lab tools to process accrual transactions. Through the cost review and analysis process, identifies needed, material accruals. Ensures that accruals meet Accrual policy guidelines for preparation and documentation.
OCFO Accrual Approver	Ensures that the accrual meets policy criteria prior to approval. Approves transactions in a timely manner.
Controller's Office Staff	Ensures Berkeley Lab's financial policies are up to date and comply with DOE Financial Management Handbook requirements and generally accepted accounting principles, making modifications as appropriate. Primarily responsible for financial statement reporting, with inputs from divisions as needed. Processes accruals as identified in the table shown in Section D above.

F. Definitions/Acronyms

Term	Definition
Accrual	An accrual is an accounting transaction to record costs in Berkeley Lab's financial management system for labor, acquisitions, travel, and construction in progress where the benefit is received (goods received, services performed) during the current fiscal period, for which an invoice, for example, has not been received / processed in the system.
Liability	A probable future outflow or other sacrifice of resources as a result of past transactions or events.
Project	An identification number used at the Berkeley Lab to manage a scope of work, accumulate, track and report funding and costs.

G. Recordkeeping Requirements

None

H. Implementing Documents