Imputing Revenue for Service and Recharge Centers – Imputing revenue represents the process of adjusting revenue to reflect an amount free from subsidies and other less than full reimbursements, e.g., bad debts, when determining future rates for recharging. In essence it adjusts revenue to assume full reimbursement from all users of the service/recharge center. This is necessary to ensure the Federal government does not wholly or partially participate in the subsidies or other less than full reimbursements. Recovery of the subsidy would need to be done through non Federal sources and usually from non University sources. Most commonly this would be recovered from external users by crediting the center’s reserve budget or an alternate budget. Depending on the amount of the subsidy this could also be recovered over a period of time, e.g., 2-3 years.
Example:
Department contributes a $10,000 piece of equipment to a service center. In consideration of this the service center provides the department with $10,000 of unbilled service. For the current rate cycle the annual operating costs for the center were estimated to be $100,000. For determining rates for the next rate setting cycle the unit would need to determine their carry forward balance as follows:
Actual expenses for the year $101,000
Less:
Actual revenue (internal/external) (89,000)
Imputed revenue1 (10,000)
Net (profit)/loss (carry forward) $ 2,000
1 Represents unbilled services to department in consideration of equipment purchase of $10,000