How should districts record the return of unused grant monies and interest earned in excess of $100?
Amounts received from federal or state sources that will require reversion if not spent should be recorded as cash and deferred revenues upon receipt, and later recognized as revenue simultaneously with the recognition of the expenditure. Upon the actual reversion of any unexpended portion of these monies, districts should reverse the initial entry for the amount reverted. (Alternatively, districts may choose to record such grants as revenues upon receipt, then at year-end reclassify the unspent portion from revenue to deferred revenue.) When interest in excess of $100 per grant is received, the excess portion should be recorded as a liability. The liability should be reversed when interest in excess of $100 is reverted.
