Reporting Requirements for Annual Financial Reports of State Agencies and Universities
Capital Assets
Sale, Disposal or Interagency transfer of Capital Assets
Recording Transfers Out of Capital Assets
When transferring capital assets between state agencies, a net increase or decrease is realized — rather than recognizing a gain or loss.
In the entries below, it is important to note there are two “Seq. No. (4).” When figuring the effect of the transfer, the transfer out agency must determine if there is a net increase in the transfer of the asset or a net decrease in the transfer of the asset. This net increase/decrease determines which T-code and COBJ to use for “Seq. No. (4).”
| Example of Increase Net Assets Due to Interagency Transfer of Capital Assets | Example of Decrease Net Assets Due to Interagency Transfer of Capital Assets | ||||
|---|---|---|---|---|---|
| Historical Cost | 10,000 | Historical Cost | 10,000 | ||
| Less Accumulated Depreciation | (7,000) | Less Accumulated Depreciation | (7,000) | ||
| Net Book Value | 3,000 | Net Book Value | 3,000 | ||
| Less Cash Received from Transfer Out | (5,000) | Less Cash Received from Transfer Out | (2,000) | ||
| Increase on Transfer Out | (2,000) | Decrease on Transfer Out | 1,000 | ||
| Treatment of Increase on Transfer of Asset | Treatment of Decrease on Transfer of Asset | ||||
|---|---|---|---|---|---|
| Accumulated Depreciation | 7,000 | Accumulated Depreciation | 7,000 | ||
| Cash Received from Transfer Out** | 5,000 | Cash Received from Transfer Out** | 2,000 | ||
| Increase Interagency Transfer Out | 2,000 | Decrease Interagency Transfer Out | 1,000 | ||
| Capital Asset | 10,000 | Capital Asset | 10,000 | ||
Business-Type Activities (Fund Type 05) and
Component Units (Fund Type 15)
- Use T-code 631 with COBJ 3843 if there is a net increase in interagency transfers.
- Use T-code 632 with COBJ 7858 if there is a net decrease in interagency transfers.
- The GL account number used corresponds to the asset (and related depreciation) that is transferred.
| Seq No | Batch Type | Doc Type | Eff Date | Fin Agy | TC | AY | PCA | COBJ | Amount | R | Fund | Input GL |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| To Reverse Sales Transfer of Capital Assets | ||||||||||||
| (1) | 5 | U | 0832CY | XXX | 630 | CY | 99999 | 3984 | $ XX.XX | R | XXXX | 9999 |
| To Reverse the Accumulated Depreciation Associated with Asset Transferred Out | ||||||||||||
| (2) | 5 | U | 0832CY | XXX | 644 | CY | 99999 | N/A | $ XX.XX | XXXX | XXXX | |
| To Reverse the Historical Cost of the Asset Transferred Out | ||||||||||||
| (3) | 5 | U | 0832CY | XXX | 645 | CY | 99999 | N/A | $ XX.XX | XXXX | XXXX | |
| To Record a Net Increase on the Transfer of Assets | ||||||||||||
| (4) | 5 | U | 0832CY | XXX | 631 | CY | 99999 | 3843 | $ XX.XX | XXXX | 9999 | |
| –OR– To Record a Net Decrease on the Transfer of Assets |
||||||||||||
| (4) | 5 | U | 0832CY | XXX | 632 | CY | 99999 | 7858 | $ XX.XX | XXXX | 9999 | |
Accounting effect of above entries:
| Debit | Credit | ||
|---|---|---|---|
| (1) | To Reverse Sales Transfer of Capital Assets | ||
| 5100* GAAP Revenue Offset | $ XX.XX | ||
| 9999 System Clearing | $ XX.XX | ||
| (2) | To Reverse the Accumulated Depreciation Associated with Asset Transferred Out | ||
| XXXX General Ledger Account for Asset Depreciation | $ XX.XX | ||
| 9999 System Clearing | $ XX.XX | ||
| (3) | To Reverse the Historical Cost of the Asset Transferred Out | ||
| 9999 System Clearing | $ XX.XX | ||
| XXXX General Ledger Account for Asset | $ XX.XX | ||
| (4) | To Record a Net Increase on the Transfer of Assets | ||
| 9999 System Clearing | $ XX.XX | ||
| 5100 GAAP Revenue Offset | $ XX.XX | ||
| –OR– | |||
| (4) | To Record a Net Decrease on the Transfer of Assets | ||
| 5600 GAAP Expenditure Offset | $ XX.XX | ||
| 9999 System Clearing | $ XX.XX | ||
| *This entry assumes the original transfer out was recorded to COBJ 3984 | |||
Governmental Activities – Basis Conversion (Fund Type 11)
- Use T-code 516R with COBJ 3843 if there is a net increase in interagency transfers.
- Use T-code 517R with COBJ 7858 if there is a net decrease in interagency transfers.
- The GL account number used corresponds to the asset (and related depreciation) that is transferred.
| Seq No | Batch Type | Doc Type | Eff Date | Fin Agy | TC | AY | PCA | COBJ | Amount | R | Fund | Input GL |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| To Reverse Sales Transfer of Capital Assets | ||||||||||||
| (1) | 5 | U | 0832CY | XXX | 516 | CY | 99999 | 3984** | $ XX.XX | XXXX | 9992 | |
| To Reverse the Depreciation Associated with Asset Transferred Out | ||||||||||||
| (2) | 5 | U | 0832CY | XXX | 534 | CY | 99999 | N/A | $ XX.XX | XXXX | XXXX | |
| To Reverse the Historical Cost of the Asset Transferred Out | ||||||||||||
| (3) | 5 | U | 0832CY | XXX | 535 | CY | 99999 | N/A | $ XX.XX | XXXX | XXXX | |
| To Record a Net Increase on the Transfer of Assets | ||||||||||||
| (4) | 5 | U | 0832CY | XXX | 516 | CY | 99999 | 3843 | $XX.XX | R | XXXX | 9992 |
| –OR– To Record a Net Decrease on the Transfer of Assets |
||||||||||||
| (4) | 5 | U | 0832CY | XXX | 517 | CY | 99999 | 7858 | $ XX.XX | R | XXXX | 9992 |
Accounting effect of above entries:
| Debit | Credit | ||
|---|---|---|---|
| (1) | To Reverse Sales Transfer of Capital Assets** | ||
| 6135* BC Other Financing Sources | $ XX.XX | ||
| 9992 BC System Clearing | $ XX.XX | ||
| (2) | To Reverse the Depreciation Associated with Asset Transferred Out | ||
| XXXX General Ledger Account for Asset Depreciation | $ XX.XX | ||
| 9992 BC System Clearing | $ XX.XX | ||
| (3) | To Reverse the Historical Cost of the Asset Transferred Out | ||
| 9992 BC System Clearing | $ XX.XX | ||
| XXXX General Ledger Account for Asset | $ XX.XX | ||
| (4) | To Record a Net Increase on the Transfer of Assets | ||
| 9992 BC System Clearing | $ XX.XX | ||
| 6135 BC Other Financing Sources | $ XX.XX | ||
| –OR– | |||
| (4) | To Record a Net Decrease on the Transfer of Assets | ||
| 6160 BC Other Financing Uses | $ XX.XX | ||
| 9992 BC System Clearing | $ XX.XX | ||
| *This entry assumes the original transfer out was recorded to COBJ 3984 **Verify that the Sales Transfer of Capital Assets 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. |
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