Cash and Cash Equivalents
West Virginia University Policy
Division of Administration and Finance
CASH AND CASH EQUIVALENTS POLICY
Reason For This Procedure:
- To define cash and cash equivalents for external reporting in a manner that complies with Governmental Accounting Standards Board Statements.
To Whom Does This Procedure Apply:
- This Procedure applies to all West Virginia University departments, including those on the regional campuses - Potomac State College of WVU, WVU Institute of Technology, Charleston division of the Robert C. Byrd Health Sciences Center, Jackson’s Mill State 4-H Conference Center and Camp, and the WVU Farms – and the West Virginia University Research Corporation.
All currency, coins and demand deposits maintained at banking institutions.
Highly liquid investments that are convertible to known amounts of cash; have an original maturity of three months or less at the time of purchase; and have insignificant risk of change in fair market value due to shifts in the interest rate.
- Cash includes deposits held by state agencies on behalf of the institution, for example, cash on deposit with the State of West Virginia. These funds are maintained at a banking institution by the state.
- For cash equivalents, original maturity is a classification made at the time of purchase and is the period of time until the instrument reaches maturity (not the maturity on the original instrument). Therefore a three-year Treasury Note purchased two months from maturity would be classified as a cash equivalent. Since the cash equivalent classification is made at the time of purchase, no reclassification of short-term investments to cash equivalents will be made. Examples of cash equivalents would be cash in money market investments.
- The responsibility for procedure development of this policy rests with Institutional Accounting, Reporting and Analysis.
- The responsibility for implementation of this policy rests with Institutional Accounting, Reporting and Analysis.
- The responsibility for interpretation of this policy rests with Institutional Accounting, Reporting and Analysis.
Additional information or questions regarding this procedure can be obtained by contacting:
- Institutional Accounting, Reporting and Analysis at 304.293.4008.
Updated: February 8, 2016
Approved by: Daniel A. Durbin, Senior Associate Vice President for Finance