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How to pay for higher education is a topic of conversation in many households and in legislatures across the country. Yet even as these conversations take place - the cost of providing that education continues to increase.

Many of you are probably wondering why this happens.

Recently, CU has seen a shift in student enrollment to majors that simply cost more. They cost more due to a dependence on laboratory space, advancing technologies, or other market-driven costs. This contributes to an operating loss.

While it’s normal for a public university to have an operating loss, it is unusual for those operating losses to increase year after year. This is currently the case with CU.

Despite all of this, CU still works hard to keep education affordable by limiting tuition increases. Other revenue sources such as gifts and investment income are becoming increasingly important.

These revenue sources, however, are very dependent on conditions outside of CU's control. So what is the conclusion to the story of the cost of higher education? We don’t know yet. But we do know that CU is committed to exploring new revenue opportunities and to effectively and efficiently utilizing all the resources it has at hand.

We hope this Illustrated Guide serves as a starting point for answering some of your questions related to CU’s financial position.

Balance Sheet:


Our starting point is where CU holds its resources and the claims against those resources. In the Annual Financial Report, this is reported in the Statements of Net Position, popularly known as the Balance Sheet.


The resources held by CU are called assets, the claims against those resources (assets) are called liabilities, and the difference between the two is called net position. Net position can either be positive (usually a good thing) or negative (probably a bad thing).

Assets and liabilities are broken into current and noncurrent. The ratio of current assets to current liabilities is one indicator of financial health. A ratio greater than 1 demonstrates an ability to pay obligations as they become due ... and is therefore favorable. CU has maintained a ratio greater than 1 for the past 10 years.

CU holds a variety of investments to diversify risk and maintain returns. Investments are typically held until maturity - but the financial statement reflects the changes in fair value of those investments even though these changes are unrealized (CU hasn't sold the investments so it hasn't realized the underlying gain or loss). So: investment income can swing widely from year to year depending on prevailing interest rates, significantly impacting the University's results year over year.
Capital Assets
Add capital assets (buildings, land, equipment, etc.) to investments and you now account for over 90% of CU's assets (resources) ... Unlike cash and investments, capital assets cannot be spent so they do not provide the cash necessary to fund University operations. In fact, as buildings age, the cost to maintain them increases, resulting in additional expense to CU.
Accounts Receivable
The bulk of CU's remaining assets are accounts receivable. These receivables are primarily due from students, from federal, state, and private sponsors, and from patients. Not all payments owing to the University will necessarily be collected. CU estimates the dollar amount that will not be collected and records an allowance for bad debt to offset the gross amount of the receivables.

Let's look at Total Assets

Now that we've reviewed the different types of assets, let's take a look at CU's total assets over the last 10 years ... These represent the sum of what the University owns - some of these assets (such as buildings) are recorded at historical cost - and others (such as investments) are recorded at fair value. Increases in total assets over time are generally indicative of a growing institution.

Total Assets

in thousands

Balance Sheet:


Next, the Balance Sheet presents the claims on the University's assets - otherwise known as liabilities.


Balance Sheet:

Net Position


Net Position = (Assets + Deferred Outflows) - (Liabilities + Deferred Inflows)

Net position is broken down into:

Net investment in capital assets

CU's capital asset balance less debt issued to fund those capital assets - this is typically over 50% of CU's total net position but doesn't reflect spendable reserves.

Net position restricted for nonexpendable purposes

Endowments received as gifts: only the investment earnings on the gift can be spent and then only on scholarships, endowed chairs, and the like.

Net position restricted for expendable purposes

Entire gift can be spent, not just the investment earnings. Funds can be spent only in accordance with restrictions established by external third parties.

Unrestricted net position

Balances designated for use by leadership to address University needs.

Why is there such a decrease in Unrestricted Net Position?

The significant decrease in unrestricted net position between fiscal year 2014 and fiscal year 2015 is directly attributable to the implementation of the new pension standard. The impact on unrestricted net position was a reduction of approximately $989,588,000.

Income Statement

Now that we have covered the Balance Sheet, let's move on to the Statements of Revenues, Expenses, and Changes in Net Position, commonly referred to as the Income Statement. The Income Statement shows where the University gets its money (revenues) and how it spends its money (expenses).

The Income Statement is broken into 3 distinct sections.


Any Surprises here?


You may have noticed that State appropriations are not among the major sources of nonoperating revenue.

In total, CU receives approximately five percent of its funding from the state. Absent changes in the state's fiscal structure, this amount is expected to remain low.



Now it is your turn.

In the introduction, we stated our goal to present the University of Colorado's financial information in an easily understandable manner through the use of this website. So, how did we do? Is there something you think should be more fully explained? Please use this feedback form to let us know!

Transparency and clarity go hand-in-hand. We've taken an initial step to providing clarity to CU's financial statements. Now it is your turn to help us make additional strides in this ongoing effort. Thanks for your time and we look forward to reporting back to you next year!

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