The Catholic University of America

Archived 11-3-08

Finance: Accounting
Allowance Policy


Approved by: Board of Trustees
History: Issued -- March 14, 2002
Revised --
Related Policies:
Additional References:
Responsible Official: Treasurer and Vice President for Finance and Administration 202-319-5606

I. Introduction

The university, to accurately recognize revenues on its financial statements, must provide for the possibility that some future revenues may not be collectible. To assure the most accurate data, methods of developing allowances for uncollectible amounts must be developed, based on actual experience and other relevant data.

This policy applies to the recording of all future revenues on the university's financial records.

II. Definitions
N/A

III. Allowances Required

The university shall calculate an allowance for collectibility for any revenues for which uncertainty exists about the amount of future collections.

Examples of these include but are not limited to:

  • Student Accounts Receivable
  • Student Loans Receivable
  • Pledges Receivable
  • Future Interests in Split Interest and Trust Agreements
  • Grants & Contracts Receivable

IV. Method for Calculating Allowance

The method for calculating allowances shall be based on historical experience and shall be calculated at least annually, based on the most recent years' experience as well

as other know factors specific to the particular revenue.

V. Documentation

The individual calculating the allowance basis shall submit to the University Controller documentation of the calculation basis.