Responsible Office: Financial Services
Subject Area: Accounting
Responsible Office: Financial Services
Sponsor: Associate Vice President for Finance
Originally Issued: January 1995
Revised: June 1996, January 2010
Refer Questions To: James Ribikawskis, 773-702-3690
Purpose: To establish responsibility for the accounting for University investments.
Policy
- Financial Services is responsible for accounting for all University investment transactions entered into the Financial Accounting System.
- All investment holdings will be reconciled monthly to the accounting records of the University's custodian banks by Financial Services.
- Investments will be stated at fair value. The value of publicly-traded fixed income and equity securities is based upon quoted market prices and exchange rates, if applicable. The fair value of significant direct real estate investments is determined from periodic valuations prepared by an independent appraiser. Fair values for certain private equity and natural resource investments held through limited partnerships or commingled funds are estimated by the respective external investment managers if market values are not readily ascertainable. These valuations necessarily involve estimates, assumptions and methods which are reviewed by the University's Investments Office.
- Premiums or discounts which are recorded at the time of purchase will be amortized on a yield to maturity basis over the life of the security.
- Realized gains and losses on sales of securities will be recorded at the time of sale.
- Accounting for pooled investments will provide for an equitable distribution of investment income and a means for determining a participating fund's equitable share of gains and losses, realized and unrealized, on investments.
- Investment income will be recognized on an accrual basis.