Policy References:

National Council on Governmental Accounting (NCGA) Statement 1
GASB Codification Section 2900 – Interim Financial Reporting

Section 8 of the State Finance Law requires the State Comptroller to prepare certain financial statements on an interim basis.

Process and Document Preparation:

Interim financial reporting relates to only Governmental Fund financial statements and summarized financial data for periods shorter than the State's fiscal year. Generally, the information used to prepare interim reports will be obtained and applied using the same accounting principles, methods and practices used to prepare the annual financial statements. Some exceptions to this policy are required due to the shorter time frame in which interim statements must be prepared. Exceptions are also caused by the need to disclose certain economic events occurring during the fiscal year but not impacting the annual financial statements.

The following identifies issues and disclosure requirements associated with interim reporting, and lists the interim reports that will be prepared.

• Prior Period Adjustment - The effect of a change in an accounting estimate will be reflected in the interim period in which the revision is made and results of prior interim periods will not be restated. Restatements will be made in the case of accounting changes and/or errors.
• Revenues - The treatment of revenues on an interim basis are discussed in the appropriate revenue sections of this manual.
• Expenditures - The treatment of expenditures on an interim basis are discussed in the appropriate expenditure sections of this manual.
• Footnote Disclosure - When interim financial information is presented in statements in conformity with generally accepted accounting principles, the following should be disclosed:
  • Data necessary to prevent the interim information from being misleading. Accordingly,(a) extraordinary or material, unusual, or infrequently occurring items; (b) significant effects of changes in accounting principles or practices from those used in the comparable interim period of the prior year, the preceding interim period of the current year, or the prior fiscal year; and (c) the acquisition or disposition of significant operations, assets or liabilities should be noted. The ordinary disclosures contained in the annual financial statements need not be repeated at interim dates if circumstances and conditions are substantially unchanged from those existing at the date of the latest annual statements.
  • Uncertainties that could affect the fairness of the information, including significant changes in the status of loss contingencies since the previous reporting date;
  • Significant changes in accounting estimates that are material to the interim period and the effects of any adjustments made to prior interim periods in the current year.
  • If revenues, costs or expenses are accrued or deferred at interim dates in a manner different from that at year-end. The method used and the amount of such accruals or deferrals are estimates based on actual fiscal year end accruals.

Financial Statements - Section 8 of the State Finance Law requires the preparation of a Combined Balance Sheet and a Combined Statement of Revenues, Expenditures and Changes in Fund Balances, for the governmental funds only, on an interim basis. In addition, a report that reconciles revenues and expenditures from cash to GAAP must be provided to the Legislature. The reconciliation of expenditures from cash to GAAP must be completed by department/division for certain State agencies and by function.

Guide to Financial Operations

REV. 02/23/2018