Accounting and Finance—Account Reconciliation
It is Company policy to reconcile every Balance Sheet (B/S) account with a closing balance greater than $5,000 USD on a monthly basis in accordance with the Accounting and Finance close schedule. B/S accounts with a closing balance less than $5,000 must be reconciled at least once a quarter. These analyses and reconciliations are to be prepared and reviewed by the appropriate divisional personnel, with all analysis subject to corporate review and audit.
Account reconciliations shall be forwarded for review and sign-off by the business area's respective financial manager or designate.
Underlying detail, in the form of a subledger or schedule, must support every B/S account balance, and such detail must be reconciled to the general ledger.
Any unreconciled differences must be investigated and resolved, with adjustments made in a timely manner prior to the end of the quarter. Upon completion of the investigation, any remaining unsupported balance shall be written off.
Corporate Accounting determines account ownership based on the area that has the most knowledge and control of the account Unless internal control considerations dictate otherwise the account owner is responsible for completing the account reconciliation. The B/S account balance is determined with the close of the books at each month-end.
The reconciliation begins with the current year-to-date closing balance as per the general ledger.
Review the subledger or supporting schedule to summarize the components that correspond to the general ledgers balance. In some cases there may be more than one subledger that needs to be considered.
Subtract the general ledger and subledger (or other supporting document) closing balances to determine the difference to be reconciled.
List known adjustments that should be taken during the accounting period. Subtract the total of known adjustments from the difference to be reconciled.
The remaining balance is to be investigated and resolved.
The reconciliation status is identified as either A, B, or C.
o Circle A if there are no outstanding explanations required.
o Circle B if there are known adjustments, and list those that will be taken during the current accounting period.
o Circle C if there is a remaining balance that must be further investigated, and list the actions that will be taken during the following accounting period.
Unreconciled items and amounts must be tracked, aged, and monitored for clearing.
Each functional business area's controller or financial designate must review, agree, and sign off on the reconciliation.
Reconciliations for accounts with closing balances greater than $100,000 USD must be submitted to Corporate Accounting for additional review at the end of each quarter.
The reconciliation must be prepared using the standard format attached (see Exhibit) or as otherwise approved by the Corporate Controller.
Account reconciliations must be completed no later than the fifth business day of the month.