Investment In Market Value
1.0 PURPOSE
The purpose of this procedure is to document the accounting entries for adjusting investments to market value as required by GASB Statement 31, and in compliance with Notice to State Agencies FM97-111 dated August 29, 1997.
2.0 SCOPE
The scope of this document is to serve as desk procedure for transaction processing staff, and the documentation for audit purposes.
3.0 DEFINITIONS
This procedure implements GASB Statement NO. 31, and encompasses Pooled Investments and Investments in Endowment funds. The book values of Pool Investments are recorded in Designated Fund, account number 0160041221. The book values of Endowment Investment are recorded in Endowment Fund, account number(s) 0600001700.
4.0 PROCEDURES
The monthly increase or decrease in market value will be recorded in the general ledger in specific subaccounts. The asset subaccounts are:
- 1224 "Pool Investment Market Value Increase/Decrease"
- 1702 "Funds held in system Market Increase/Decrease"
The revenue or loss on the valuation of investment will be recorded using a fund balance subaccount number 4640 "Net Increase/Decrease in Fair Market Value of Investments.
Recording of Transactions:
The following entries will be made on a monthly basis to record market value of investments:
- To record increase in the value of Pool Investments
- Dr. 016312 1224
- Cr. 016312 4640
- To record decrease in the value of Pool Investments
- Dr. 016312 4640
- Cr. 016312 1224
- C. To record Increase in the value of Endowments
- Dr. 06XXXX (X= individual account number) 1702
- Cr. 06XXXX (X= individual account number) 4640
- D. To record Decrease in the value of Endowments
- Dr. 06XXXX (X= individual account number) 4640
- Cr. 06XXXX (X= individual account number) 1702
Reporting:
UTD internal financial statements will show both the book value and the market value of investments. The book value is reflected in object codes 1223 for Pool Investments, and 1700 for Endowments. The market value of investments is obtained by summing up object codes 1224 and 1222 for Pool Investments, and object codes 1700 and 1702 for Endowments. The monthly fluctuations in investment value are reflected in the general ledger Pool Investment and Endowment accounts under subaccount 4640.
5.0 RESPONSIBILITIES
It is the responsibility of the General Accounting Staff to record market value transactions as soon as the information is available from the University Of Texas System office.
6.0 ATTACHMENTS
- Notice to State Agencies FM97-111
- GASB Statement No. 31
Last Updated: August 8, 2012
