Highlights of Changes to the 2007 CSU GAAP Manual Chapters 4, 6, and 13 KPMG LLP

May 22, 2007 GAAP Reporting Workshop 2 Chapter 4 - GAAP Adjustments Reclassify FBC to Other LT-Investments for fund (page 4-19) Only record deferred revenue for future services where payments have been received prior to year-end. If a student pre-registers (i.e. advance registration) for classes, but does not prepay, then no deferred revenue should be reported. (page 4-30)

May 22, 2007 GAAP Reporting Workshop 3 Chapter 4 - GAAP Adjustments (cont’d) GAAP changes from RMP Effective FYE , no new prepayments on CSURMA insurance premiums. Campus may have multi-year prepayments paid in prior years that will still be a future year premium at (page 4- 21) Reclassify net cash from ST-Investments Need to consider proper net asset categories. (page 4-48) Analyze investment income in to determine if any of the investment income is related to restricted CSU funds, such as FSEOG, Pell Grant, etc. and therefore must be reclassified to the appropriate net asset categories. (page 4-49)

May 22, 2007 GAAP Reporting Workshop 4 Chapter 4 - GAAP Adjustments (cont’d) GAAP changes from RMP (cont’d) A new line item for transfers will be added to the SRECNA in the reporting package (YES) SWAT transfers and will be reported on this line item. (page 4-49) Expenditure adjustment from supplemental allocation order or de-allocation order will be reported on this line item. (page 4-49) Campus needs to evaluate any other campus specific inter-agency transfers to determine whether it should truly be reported as a transfer or whether it needs to be reclassified to the appropriate line item for GAAP reporting purposes. Refer to GASB Statement No. 34 paragraph 112 for guidance. (page 4-46)

May 22, 2007 GAAP Reporting Workshop 5 Chapter 6 - Statement of Cash Flows Cash flows affected by reclassification of A/R from CO to investments held by CO: Current year activity in FBC for (centralized unions), and 0576 should be analyzed as specified in steps 26 and 28 to determine the proceeds from sales of investments and cash used to purchase investments, respectively. (page 6-10) Change in investment balance for fund 0578 represents monies transferred in excess of debt service payments or debt service payments in excess of monies transferred, plus any investment income received. Since investment income received is shown on a separate line item, the remaining change in the investment balance can be classified as sales of investments if the net change is a decrease in the balance, or purchases of investments if the net change is an increase in the balance. (page 6-10)

May 22, 2007 GAAP Reporting Workshop 6 Chapter 6 - Statement of Cash Flows (cont’d) Cash flows affected by reclassification of A/R from CO to investments held by CO (cont’d): Reclassify PY’s ending balances for A/R and Investments to determine the changes on the SNA. (cash flows workbook) Added interest expense reconciliation on the additional cash flows data worksheet. (cash flows workbook)

May 22, 2007 GAAP Reporting Workshop 7 Chapter 13 - Capital Assets Guide Provided additional discussion to capitalization of software development costs. (page 18) Provided additional discussion of costs associated with (CMS) / PeopleSoft implementation and upgrade. (page 19) Identified types of campus costs after baseline product delivery and provided guidance on whether they should be capitalized or expensed. (page 20)

May 22, 2007 GAAP Reporting Workshop 8 Questions??