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Internal vs. External Activity and Balances
•2 options for distinguishing between internal/external transactions in STARS:
–Dual set of revenue/expenditure object codes – one for transactions with internal parties, one for transactions with external parties
–New data element to identify each STARS document as internal/external
•Advantages for new data element option
–STARS will automatically identify and record all types of internal and external batch type transactions except journal vouchers
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In the process of aggregating data for the statements of net assets and the statements of activities, some amounts reported as interfund activity and balances in the funds should be eliminated or reclassified.

Eliminations in the statement of activities should be made to eliminate the grossing-up effect.  Interfund receivables and payable should be eliminated in the governmental and business-type activities columns of the statements of net assets, except for the net residual amounts due between governmental and business type activities.  Amounts reported in the funds as receivable from or payable to fiduciary funds should be included as receivables and payables to external parties.  All internal balances should be eliminated in the total column.