Posting Conversions Entries in Gravity

Your Governmental Fund statements are prepared on a modified accrual basis, while the government-wide statements are prepared on a full accrual basis. 

Where Conversion Entries Come From

Conversion entries can be sourced in two ways:

1. Manual Adjustments in Gravity
   Users can enter manual conversion entries directly into the Reconciliation to Government-Wide cube.
2. Entries Imported from Your Trial Balance
   If your accounting software or ERP already posts conversion entries, Gravity will read them from the trial balance and map accordingly.

Reporting Funds in the Reconciliation Cube:

Within the Reconciliation to Government-Wide cube, the Reporting Funds dimension will include:

• Only the funds that are relevant for conversion entries coming from your trial balance

or

• One “Conversion Entries (CE)” dump fund, which exists solely to support manual adjustments.
  
   

When entering manual conversion entries in system, you will use this CE fund.

To automate the conversion between these two bases, system provides a centralized area for all conversion entries: the Reconciliation to Government-Wide hypercube.

Statement Structure in the Cube

The cube uses the structure of the Reconciliation Statements (not the government-wide statements themselves). This means that when you enter a conversion entry, you can immediately specify which reconciliation line the entry should impact.

The structure includes two reconciliation statements:

1. Reconciliation of the Balance Sheet to the Statement of Net Position
   – For entries affecting government-wide net position (assets, liabilities, DOR, DIR).
2. Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities
   – For entries affecting government-wide activities (revenues and expenses).

Role of the Reconciliation Cube

Because this cube contains only conversion entries, it becomes the sole data source for the reconciliation statements. The reconciliations represent the differences between the fund-level statements and the government-wide statements; by entering all conversion entries here, you ensure that the reconciliation statements correctly reflect that difference.

• If all conversion entries are already included in your trial balance, you can move directly to reviewing the government-wide statements after ensuring that all relevant rows would be mapped. This can be confirmed when there are no unmapped accounts in the Mapping menu. 
• If not, you will need to enter the required adjustments within system using the Reconciliation to Government-Wide cube.

Viewing Prior-Year Conversion Entries

To review conversion entries made in a prior year:

1. Open the Posted Adjustments panel.
2. Filter the grid by the desired fiscal year.
   This will display all conversion entries posted for that period.

If you want to review entries by adjustment group, you can navigate using the Adjustment Number. All entries with the same adjustment number belong to the same group and will always net to zero.

Example:
To review all entries related to adding capital assets, locate and filter by the adjustment number assigned to that group. Once you have located the adjustment number, you can copy the adjustment.

Copying Prior-Year Adjustments to the New Year

Before posting current year adjustments, you may want to start from the prior-year entries instead of recreating everything from scratch.

There are two ways to copy adjustments:

1. Automatic Copy During Roll Forward

During the year-end roll forward, system can automatically copy prior-year adjustments into the new year.

2. Manual Copy Inside the Cube (if they were not copied during roll forward)

If adjustments were not brought forward automatically, you can manually copy them within the Reconciliation to Government-Wide cube. 

If you need assistance to make adjustments in Gravity, utilize these learning materials. 

The best practices with conversion entries.

Option 1. Posting entries for Opening Balances and Current year Changes as separate adjustments 

1. Start With Opening Balances

Begin by entering all beginning-of-year government-wide balances to “Ending balance” column:

• Beginning/Opening Assets
• Beginning/Opening Liabilities
• Beginning/Opening Deferred Outflows of Resources 
• Beginning/Opening Deferred Inflows of Resources 
• Balance the net amount to Beginning net position, as previously reported

This establishes the correct starting point before current-year activity is recorded.

2. Enter Reversing Entries

• Capital outlay portion that should be capitalized
• Debt service principal payments (reverse expenditure → reduce liability)
• Revenues that were deferred as unavailable under modified accrual
• Lease payments recorded differently under GASB 87/96 etc.

Reversals clear fund-level accounting so the full-accrual entries can be applied correctly.

3. Enter Current-Year Full-Accrual Adjustments

Record the current-year changes in:

1. Assets
2. Liabilities
3. Deferred Outflows of Resources 
4. Deferred Inflows of Resources 

Balance these entries with the appropriate Revenue or Expense accounts. See example below:

Option 2. Posting combined adjustments for Opening Balances and Current year Changes grouped by type

Adjustments can be posted by types (ex: capital assets, long term liabilities etc..)
For example, posting adjustment for the Capital Assets group first will affect 3 different lines (Capital Assets Ending Balance, Depreciation Expense and the balancing amount of Beginning net position). In this case, the related impacts are captured through a single grouped adjustment rather than separate entries.

As example, please, see table below:

Option 3 (Ending GASB Assets/Liabilities/Net Position are included in the Trial Balance while Revenues and Expenses are not)

In this case there is a still need for 2 sides adjustment balancing revenue and expenditures with Net Position (usually it is R.1.04.03).

As example, please, see table below:

When all adjustments are posted, you need to make sure that total for R.1.04.03 (sum of Net position accounts from Trial balance and adjustments) equals to Beginning Balance of GASB Fund(s). 

Recommended but not limited way of doing it is to check it to the prior year “Reconciliation of the Balance Sheet to the statement of Net Position”.

 

Important note:

Various expenses and revenues must be reported by function in the Statement of Activities. When entering adjustments, assign amounts to the proper functional categories such as fill Department, Activity, or Function columns or any other column required.

To see which columns must be filled out: 

1. In the adjustments menu, click on “A” icon in the top right-hand corner of the unposted adjustments panel. 

After clicking the icon, all the required column titles will be highlighted in blue. 

Example: Depreciation

Categories such as depreciation need to be split by function:

1. Depreciation – General Government
2. Depreciation – Public Safety
3. Depreciation – Public Works
4. Depreciation – Parks & Recreation etc.

Splitting expenses by function ensures the Statement of Activities reflects the correct cost of each governmental function. Meaning, a line item for depreciation will appear under expenses for General Government, Public Safety, Public Works, and Parks & Recreation. 

How to post new adjustment entries 

Ensuring Automation in your Report

Since the reconciliation cube accomplishes both the creation of the reconciliation statement and the completion of the Government wide statements, it is important to note that the dimensions selected (Statement Line, General, Fiscal period) is about the reconciliation statement and the attributes are need for Government-wide statement. 

When entering conversion entries, follow this structure:

1. Type: Always select Adjustments.
2. Statement Structure:
   1. If the transaction affects Net Position (Assets, Liabilities, Net Position, Deferred Outflow of Resources, Deferred Inflow of Resources), select the appropriate line under Reconciliation of the Balance Sheet to the Statement of Net Position
   2. If the transaction affects the Statement of Activities (Revenue, Expenses, Transfers), select the appropriate line under Reconciliation to Statement of Revenue and Expenditures.
3. Fund: Always select CE (Conversion Entries).
   1. Conversion entries are not tied to a specific fund, so using CE ensures proper reporting in your reconciliation statements.

Following this process ensures that your conversion entries are mapped correctly in the Reconciliation Statements.

Using Statement Line Names Instead of Accounts

If you are unsure which account to use:

1. You can enter a descriptive name instead of an account code (e.g., “Capital Outlay”).
2. Then create a local rule in the Government-wide cube that maps entries with account code “Capital Outlay” to the correct line in the Government-wide statement.
   1. This makes entry easier while maintaining correct mapping in the Government-wide statements.