Western Michigan University Western Michigan University
Western Michigan University
Notes to Financial Statements toStatements Financial Statements Notes to Notes Financial June 30, 2013 and 2012 June 30, 2013 and30, 20122013 and 2012 June
Note 1 - Basis of Presentation and Significant Accounting Policies Note 1 - Basis of Presentation and Significant Accounting Policies Basis of Presentation Basis of Presentation The financial statements of Western Michigan University (the “University”) have been prepared in The financial statements of Western Michigan University (the “University”) have prepared in accordance with generally accepted accounting principles as prescribed by been the Governmental accordance generally accepted principles as “businessprescribed type” by the Governmental Accounting with Standards Board (GASB). accounting The University follows the activities reporting Accounting Standards (GASB). requirements of GASBBoard Statement No.The 34. University follows the “business- type” activities reporting requirements of GASB Statement No. 34. The financial statements of the University have been prepared on the accrual basis, whereby all The financial statements of earned the University have beenare prepared onwhen the accrual basis, revenue is recorded when and all expenses recorded they have beenwhereby reduced all to a revenue recorded when earned and all expenses are recorded when they have been reduced to a legal oriscontractual obligation to pay. legal or contractual obligation to pay. GASB Statement No. 34 establishes standards for external financial reporting for public colleges and GASB Statement 34 establishes standards for external reporting for public colleges and universities andNo. requires that resources be classified for financial accounting and reporting purposes into the universities and requires that resources be classified for accounting and reporting purposes into the following categories: following categories: Net investment in Capital Assets - Capital assets, net of accumulated depreciation and Net investment in Capital Assetsof - debt Capital assets, netto oftheaccumulated andor outstanding principal balances attributable acquisition,depreciation construction, outstanding balances of debt attributable to the acquisition, construction, or improvementprincipal of those assets improvement of those assets • Restricted - Net assets subject to externally imposed constraints that they may be • Restricted Net assetsby subject to externally imposed that theyis may beto maintained -permanently the University, or net assets whoseconstraints use by the University subject maintained by the University, or fulfilled net assets by University the University is subject to externally permanently imposed constraints that can be by whose actionsuse of the pursuant to those externally imposed that can beoffulfilled constraints or thatconstraints expire by the passage time. by actions of the University pursuant to those constraints or that expire by the passage of time. • Unrestricted - Net assets that are not subject to externally imposed constraints. • Unrestricted - Net that are notforsubject externally imposed constraints.or Unrestricted net assetsassets may be designated specific to purposes by action of management Unrestricted nettrustees assets may designated for specific purposes by by action of management or the board of (the be “Board”) or may otherwise be limited contractual agreements the board of trustees (the “Board”) or may otherwise be limited by contractual agreements with outside parties. with outside parties. Effective July 1, 2012, the University implemented the provisions of GASB Statement No. 63, Effective 1, 2012,of the University implemented the provisions of GASB FinancialJuly Reporting Deferred Outflows of Resources, Deferred Inflows of Statement Resources, No. and63, Net Financial Deferred No. Outflows of Resources, of Resources, andThese Net Position,Reporting and GASBofStatement 65, Items Previously Deferred Reported Inflows as Assets and Liabilities. Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. These statements introduce and define those elements as a consumption of net assets by the University statements introduce define those period elements consumption of net assets byUniversity the University that is applicable to aand future reporting andasana acquisition of net asset by the that is that is applicable to a future reporting period and an acquisition of net asset by the University that is applicable to a future reporting period, respectively. The standards also incorporate deferred applicable a future and reporting period, respectively. Theasstandards incorporate deferred outflows ofto resources deferred inflows of resources, defined byalso GASB Concepts Statement outflows of resources and deferred inflows ofcomponents resources, as by GASB Concepts Statement No. 4, into the definitions of the required of defined the residual measure of net position, No. 4, intonet theassets. definitions the required components the residual of nettoposition, formerly This of statement also provided a newofstatement of netmeasure position format report all formerly assets. This statement also provided new statement position format report allAs assets, net deferred outflows of resources, liabilities,adeferred inflowsofofnet resources, and nettoposition. assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position. As a result of adopting GASB No.65, the University expensed approximately $2 million of previously a capitalized result of adopting GASB costs. No.65, the University expensed approximately $2 million of previously bond issuance capitalized bond issuance costs. 24 24 •
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