Balance Sheet Account

A Balance Sheet Account is a tool used in dual entry accounting to record assets, contra assets (also known as asset offsets), liabilities, and equity accounts.  Similar to object and revenue sources, these balance sheet accounts are often established to meet the reporting requirements of both external parties and those mandated by management to fulfill internal accountability requirements.  The number of balance sheet account codes that need to be established are identified by management to meet the needs of both the external parties and those mandated by management to fulfill internal accountability requirements.

The Sub Balance Sheet Account chart of accounts data element can be used to further classify the financial activity within a given Balance Sheet Account.  For example, using the information provided above, a client may want to further delineate the types of fixed assets associated with Balance Sheet Account '2100' for fixed assets.  Sub Balance Sheet accounts could be established to track the type of cars such as '00' for vehicle, '01' for truck and '03' for emergency use vehicle.  

The most common use of a balance sheet is as an offset account to balance out a spending or revenue entry.  These accounts store totals within a fund for items such as cash, equipment, accounts payable and retained earnings, forming what is known as a Balance Sheet Account (BSA).  Several sources exist to view BSA balances: ITD Balance Sheet Detail, ITD Balance Sheet Summary, and the Fiscal Year Balance Details.  As with other accounting activity, BSA balances can also be viewed on ledgers.

Sample Balance Sheet Account Hierarchies

AMS Advantage Financial provides many levels of balance sheet account (BSA) information for reporting, budgeting, and controlling.  Sub Balance Sheet Account is the lowest level and is delivered as optional.  Balance Sheet Account is the first required level followed by several optional levels: Balance Sheet Class, Balance Sheet Category, Balance Sheet Type, and Balance Sheet Group at a higher level than Balance Sheet Account.  In addition to these, expenditure accounting also uses hierarchies to support CAFR reporting with the rollups of Major CAFR Major BSA Group and CAFR Minor BSA Group.

Specific Abilities for Balance Sheet Account

The following rules and options apply to balance sheet accounts directly on the Balance Sheet Account (BSA) page:

• Account Type - identifies a BSA as either an asset, liability, equity, or asset offset for later editing with the Posting Code (PSCD) table requirement for BSAs associated with a posting code.

• Level of Balance Control - allows the choice of a level of balance control (No Error, Warning, Override, and Reject), which signifies the type of error to be issued when an account would get a contrary balance as the result of an accounting transition.  The asset account type should normally have a debit (positive) balance.  The liability, equity, and asset offset account types should normally have credit (negative) balances.  When balances are in line with the proper type, or are zero, because of a posting line update, there will be no error.  It is when the balance would become contrary, that the error is issued at the designated level for the balance sheet account.  The default value for this field is No Error.  A parameter, the BSA Control Level, on the Application Control (APPCTRL) table determines if the application will evaluate balances on the ITD Balance Sheet Detail (BBALD) or the ITD Balance Sheet Summary (BBALS) table.  The difference being a contrary balance is determined at the Fund, Sub Fund, BSA, and Sub BSA level on the ’Detail’ page or the Fund and BSA level on the 'Summary’ page.

• FASB Class Identification - for FASB clients, indicates whether the balance sheet account is unrestricted, temporarily restricted, or permanently restricted for reporting purposes.  For GASB clients, this indicator is marked not applicable.

• Cash Account - indicates a BSA as a cash account for later editing with a Posting Code (PSCD) requirement for cash accounts.

• Memo Account - indicates a BSA as a memo account for later editing with a Posting Code (PSCD) requirement for memo accounts.  The specific use of memo accounts within an application is determined by the client.  These accounts can be ones not written to accounting journals or written to those journals.  If written to journals, the accounts can be left in the year recorded or rolled forward like other BSAs.

• Payroll - indicates a BSA as one used for payroll for reporting purposes.

• Contributed Account - identifies a BSA as a contributed account for later editing on the Fixed Asset Type (FATP) table when entering a value in the Contributed Offset BSA field.  That BSA is used when a fixed asset is not purchased, but acquired by another method.

• Control Account - controls whether the selected BSA can be manually entered on the accounting line of documents in either the BSA or OBSA fields.  If this flag is selected, then an error will be issued when the document is validated or submitted.  The severity of that error message is controlled by the Message (MESG) record.

• 1099 Type of Income - allows you to choose a type of income from a pick list.  The type of income comes from the 1099 Type of Income (TINC) table.  Refer to the AMS Advantage Financial - Accounts Payable User Guide for more information on 1099 Reporting. Option also exists for Sub Balance Sheet Accounts on the SBSA page.

• 1042-S Type of Income – this field is inferred from the 1042-S Type of Income (1042T) table based on the value selected in the 1042-S Income Code ID field. Refer to the AMS Advantage Financial - Accounts Payable User Guide for more information on 1042-S Reporting. Option also exists for Sub Balance Sheet Accounts on the SBSA page.

• Contract Withholding Exempt - this check box indicates whether the payment line is exempt from contract withholding. If Contract Withholding Exempt is selected for a COA element then the accounting line will be exempt from Contract Withholding.  This option also exists for Sub Balance Sheet Accounts on the SBSA page.

• Always 1099 Reportable - indicates that an object is for legal services for 1099 reporting.  Only objects that are 1099 reportable can have this flag selected.  The result is vendors that are marked as corporations will have legal services reports on 1099 forms, but other types of vendors will not.  Option also exists for Sub Balance Sheet Accounts on the SBSA page.

The following are other areas where balance sheet accounts codes are used to control with additional elements.

• Balance Sheet Budget Fiscal Year Stage Definition

Items in "Advanced - Setup" Section

The following sections in the "Advanced - Setup" section at the end of this users guide contain the Balance Sheet Account dimension.