Part III - UNM Finance: Practical Applications

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Standard Accounting Resource Manual (SARM)

MSC 0000 00
1 University of New Mexico
Albuquerque, NM 87131

1903 - Change in Reserves Entry

The most common entry made to reserves accounts involves a movement of balance from one index to another to cover a deficit in the index or to fund an index.  Another common reason for a reserves entry is to close an index that has a balance but has had no activity in the current year; the only account with a balance is 1900 in this instance.

Another reason for reserves entries is to correct prior year entries.  When an error is found in an unrestricted index after the accounting records have been closed for the fiscal year which only affects unrestricted indices, a change in reserves entry is the method to correct the error.  These entries use account 1903 on both sides of the entry.  The indices involved must be in the same Fund level 2 and Program level 2.  If an error is between account codes within the same index, no entry is required.

These entries increase (or reduce) the prior year end remaining balance in the affected indices.  They do not affect the expense accounts where the entries originally occurred.  These entries must be well documented so the original entry that is being corrected can be identified.