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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Capital Assets

Capital Asset Accounting
AFR Preparation

Each agency reporting to the State Property Accounting (SPA) system must annually reconcile capital asset balances and activity with its internal asset management system. Agencies with capital assets are required to disclose the summary of changes in capital assets in Note 2. The agency’s Note 2 must match the SPA System. All agencies are required to submit capital asset activity disclosures through the CANSS web application. Use CANSS certified reports as the agency’s official submission to disclose the summary of changes in capital assets for the SPA/CANSS Reconciliation and AFR.

Note:

  • Notify your SPA analyst if you need assistance resolving a variance between SPA and CANSS. Email property-level detail explaining the variance(s). Your analyst will work with you to make necessary corrections or approve the variances as reconciling items that cannot be corrected in SPA.
  • Notify your financial reporting analyst if you need assistance resolving a variance between CANSS and USAS.

Each agency must begin its capital asset reconciliation of SPA to CANSS by completing the steps in the SPA/CANSS Reconciliation. Discrepancies must be corrected in SPA, CANSS and USAS during the reconciliation process by the applicable deadlines. SPA balances must tie to CANSS and USAS balances or changes will be made during ACFR preparation.

To certify in CANSS, the following capital asset columns must match to both the balance sheet/statement of net position and the operating statement by the applicable deadlines:

  • Beginning Balance column for each category of capital asset is populated in CANSS from USAS.
  • Adjustments column must match restatements COBJ 3891.1
  • Completed CIP column, reclassifications must net to zero having no effect on the operating statement.
  • Inc-Int’agy Trans column must match the sum of:2
    • COBJ 3843/7858 – net increase in assets due to interagency transfer of capital assets
    • Accumulated depreciation
    • Accumulated amortization
  • Dec-Int’agy Trans column must match the sum of:2
    • COBJ 7858/3843 – net decrease in assets due to interagency transfer of capital assets
    • Accumulated depreciation
    • Accumulated amortization
  • Additions column must match the sum of:3
    • Total capital outlay plus capital donations or capital contributions
    • Accumulated depreciation which must match total depreciation expense4
    • Accumulated amortization which must match total amortization expense5
  • Deletions column must match the sum of:
    • Net of proceeds from the sale of capital assets and any gain or loss on the sale of capital assets (COBJ 3834)
    • Accumulated depreciation4
    • Accumulated amortization5
  • Ending Balance column for each category of capital asset is populated in CANSS from USAS.

Agencies must ensure the sum of capital outlay for all governmental fund types (FT) nets to zero with the sum of capital outlay presented in basis conversion FT11. This also applies to proceeds from the sale of capital assets, which must net to zero between governmental FTs and FT11. This is done because capital outlay and proceeds from the sale of capital assets do not appear on the government-wide financial statements. Verify that capital outlay activity in governmental funds and basis conversion funds net to zero at the GAAP source/object level using the DR206 — Review Govt-Wide Basis Conversion report located in the FMQuery–SIRS AFR Desk Review menu.

To certify in CANSS, the following intangible right to use (RTU) asset columns must tie to the statement of net position and the operating statement by the applicable deadlines:

  • Beginning Balance column for each category of RTU asset (populated in CANSS from USAS)
  • Adjustments column must match restatements COBJ 38911>
  • Additions column must contain:
    • RTU assets acquisitions
    • Accumulated amortization must match total amortization expense4
  • Deletions column must contain accumulated amortization
  • Ending Balance column for each category of RTU asset (populated in CANSS from USAS)

1The restatement amount may not match the CANSS “Adjustments” column for agencies who have capital assets reported in FT05 or FT15, if restatements exist other than capital assets, as all restatements for FT05 and FT15 are reported on the same line. These agencies must provide a breakdown of the items that make up the restatement amount in Note 14.

2The net increase of an interagency capital asset transfer must match the net decrease of an interagency capital asset transfer transaction. Agencies using local depreciation and amortization calculations must record the same amount agreed during the interagency transfer of capital assets. For more information on capital asset transfers, see Recording Interagency Transfers of Capital Assets.

3Capital asset additions may not be equal to cash expenditures (FFS) due to the trade-in value of the disposed asset that is included in the value of the new asset. Additionally, capital asset additions for FT05 may not match the CANSS “Additions” column since assets are purchased from various revenue accounts.

4Accumulated depreciation will not match SPA for those agencies opting to use local depreciation methods to calculate depreciation instead of SPA calculated values. Record depreciation expense in USAS with COBJs 7936, 7937, 7938 and 7939.

5Accumulated amortization will not match SPA for those agencies opting to use local amortization methods to calculate amortization instead of SPA calculated values. Record amortization expense in USAS with COBJs 7877, 7878, 7879 and 7885.