Hi,

We have a unique situation that I haven’t run into before. It is a HUD 202 Project with a 6/30 year-end where the PRAC had expired but the contract was going through the renewal process and was renewed subsequent to year-end. HUD approved Replacement Reserve withdrawals in lieu of our normal monthly PRAC payment for the months of March, April, May and June.

Our initial entries were to credit Revenue – Subsidy Payments and debit A/R – HUD, then would debit cash-operations and credit replacement reserve.

The contract was renewed in July and the PRAC payments for the months of March-June came thru and subsequently transferred back into the Replacement Reserve account. Unfortunately, we are showing Surplus Cash at the 6/30 year-end due to that large receivable on the books.

Should I just record it as AR-Operations with an explanation? If I include it as AR-Hud, it will automatically populate in the Surplus Cash Calc in REAC-FASSUB. What is the proper accounting treatment? Thanks!