Accounting Policy Meeting
Tuesday, Aug. 25, 2020

As the process to implement GASB 84 continues to evolve, please refer to the AFR Reporting Requirements’ FAQs page for more details and agencies’ responsibilities.

Yes. Agencies can use their purchased lease software instead of the calculator tool provided in the Tools category of the right-hand navigation box on the AFR Reporting Requirements website. The calculator tool provided is available for agencies that do not have the budget to build or purchase software in order to comply with GASB 87. The Comptroller’s office is developing a tracking system, which would allow an agency to enter information into the system and keep track of its leases within the new system.

Agencies are permitted to calculate leases by schedules. However, the Comptroller’s office elected a per unit basis to calculate the net present value (NPV) of capital leases to prevent recording a liability for items (such as laptops or copiers, which are classified as “small ticket” items) as defined by GASB 87, paragraph B98. If such assets are considered to be insignificant (individually and in the aggregate), GASB 87 may not apply.

Agencies are required to use the interest rate at which the transaction is made (for example, the rate the lessor charges the agency, which may be the rate implicit in the lease). If the interest rate implicit in the lease is not readily determinable, use the agency’s estimated incremental borrowing rate. Determining the incremental borrowing rate entails estimating the interest rate the agency would be charged for borrowing the lease payment amounts during the lease term. For agencies that do not readily have a method to determine their own incremental borrowing rate, the Comptroller’s office can provide a rate for the state that could be used as a last resort. This rate is updated on a quarterly basis.

The Comptroller’s office is researching and will provide a standard interest rate for leases without a stated one. If your agency has leases with implicit interest rates, submit that information to frs@cpa.texas.gov and provide the source to add in our assessment for developing a standard interest rate.

Yes. The logic used in the calculator tool provides the necessary information for revenue leases.

The web-based tutorials are being reviewed for approval and will be available in late fall.

Agencies that are classified as GCA are responsible for completing the GCA Closing Package and submitting it to frs@cpa.texas.gov by close of business on Sep. 15, 2020.

The GCA Closing Package (an Excel file with multiple tabs) is located at the Submission Requirements of GR Consolidated Agencies page.

The topics for web-based tutorials are based on popular demand or subjects requiring special attention. If several GCAs request a tutorial for preparing their AFR, the Comptroller’s office will develop a web-based tutorial. GCAs can submit a list of potential topics to be considered for web-based tutorials to frs@cpa.texas.gov.

The OMB 2020 Compliance Supplement is now published, but it includes limited information for CARES Act and other COVID-19 programs. An addendum to the 2020 Compliance Supplement should be published this fall with additional COVID-19 program guidance.

All COVID-19 expenditures must be recorded in the SEFA web application using the C designation for batch uploads and the COVID-19 selection for individual records. This includes CARES Act funding and other federal sources of COVID-19 funds.

If COVID-19 revenue was received without related expenditures (for example, foregone revenue), the COVID-19 revenue must be disclosed as:

• a reconciling item in SEFA Note 2
  —OR—
• as deferred revenue in SEFA Note 7

The SPTR web application is currently open for entry. All web applications will open by Sep. 1, unless there is a major change.

The preferred method of the Comptroller’s office is Word or Excel format. These formats are less difficult to consolidate into the ACFR working papers.

Only one Word or Excel file can be uploaded to the web applications. Ensure that all pertinent information is included in your single Word or Excel file. In an Excel file, multiple tabs can be created, if necessary. If your agency prefers submitting Adobe PDF format, contact your financial reporting analyst and they will be happy to assist you.

The statement of cash flow USAS entry template will be available at the end of September.

The Comptroller’s office modified the SOCF web application so that it populates the amounts for the statement of cash flow directly from USAS and interfaces with the SOCF web application. Agencies no longer have the option to enter any amount in the SOCF web application.

If an amount in the SOCF web application needs to be changed, an adjustment is required in USAS to do so before the agency can certify in the SOCF web application.

The statement of cash flows entry applies only to the system of the university (institutions of higher education).

The Comptroller’s office does not record the APS webinars because it requires additional processes to transcribe and comply with the ADA 508-compliancy standards, which requires additional time and resources than the Comptroller’s office currently has.

Instead, we are amending all of the Accounting Policy Meetings’ Past Meeting pages with a text version of all Q&As (as soon as possible).