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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

Sale, Disposal or Interagency transfer of Capital Assets
Recording Sale of Capital Assets

Run the SPA CAAB 105 report to show the amount of disposals for an agency. This report contains disposals of property to parties external to the state. It includes all “hard” disposal methods, other than interagency transfers, completed CIP and assets added in error. This report is sorted by:

Subtotals are at the GAAP fund group, depreciable code and AFR category levels.

The amount for the sale of capital assets must match the amount in sale of capital assets reported in governmental fund types. When the entry is made, the balance between the governmental fund types and fund type 11 must net to zero.

Texas Facilities Commission (TFC) is required to report the full amounts of the sale proceeds to SPA. To account for the net proceeds in USAS, see Proceeds from the Sale of Surplus Property (FPP A.032). The difference is addressed in fund type 11, Basis Conversion.

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.

The deletions column in Note 2 must match the net of proceeds from the sale of capital assets and any gain or loss on the sale of capital assets.

Example of Gain on Sale of Asset Example of Loss on Sale of Asset
       
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 Proceeds from Sale (5,000)   Less Proceeds from Sale (2,000)  
Gain on Sale   2,000   Loss on Sale   1,000  
Treatment of Gain on Sale of Asset Treatment of Loss on Sale of Asset
       
Accumulated Depreciation 7,000   Accumulated Depreciation 7,000  
Proceeds from Sale 5,000   Proceeds from Sale 2,000  
Gain on Sale       2,000 Loss on Sale 1,000  
Capital Asset       10,000 Capital Asset       10,000
Example of Gain on Sale of Surplus Asset Example of Loss on Sale of Surplus Asset
*Full amount including TFC Fee
       
Historical Cost 25,000   Historical Cost 25,000  
Less Accumulated Depreciation (20,000)   Less Accumulated Depreciation (20,000)  
Net Book Value   5,000   Net Book Value   5,000  
Less Proceeds from Sale (5,500*)   Less Proceeds from Sale (2,000)*  
Gain on Sale   550   Loss on Sale   3,000  
Treatment of Gain on Sale of Surplus Asset Treatment of Loss on Sale of Surplus Asset
** Prior May 1, 2018 TFC fee was 10%
       
Accumulated Depreciation 20,000   Accumulated Depreciation 20,000  
Proceeds from Sale 4,884   Proceeds from Sale 1,760  
TFC Fee (12%)** 666   TFC Fee (12%)** 240  
Gain on Sale       550 Loss on Sale 3,000  
Capital Asset       25,000 Capital Asset       25,000

Proprietary and Fiduciary Funds

Recording Capital Asset Balances

Proprietary and fiduciary funds (pension trust and private-purpose trust) report capital assets using full accrual accounting.

Business-Type Activities (Fund Type 05) and
Component Units (Fund Type 15)

Agencies exempted From SPA and/or the General Provisions for Surplus and Salvage Property

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Fund Input GL
To Reverse Cash Revenue Recorded for Sale of Asset
(1) 5 U 0832CY XXX 630 CY 99999 XXXX $ XX.XX R XXXX 9999
To Reverse the Depreciation Associated with Asset Sold
(2) 5 U 0832CY XXX 644 CY 99999 N/A $ XX.XX   XXXX XXXX
To Reverse the Historical Cost of the Asset
(3) 5 U 0832CY XXX 645 CY 99999 N/A $ XX.XX   XXXX XXXX
To Record the Gain
(4) 5 U 0832CY XXX 631 CY 99999 3834 $ XX.XX   XXXX 9999
–OR–
To Record the Loss
(4) 5 U 0832CY XXX 631 CY 99999 3834 $ XX.XX R XXXX 9999

Accounting effect of above entries:

Debit Credit
*This entry assumes that the original sale was recorded to cash revenue.
(1) To Reverse Cash Revenue Recorded for Sale of Asset    
  5100* GAAP Revenue Offset $ XX.XX  
  9999 System Clearing   $ XX.XX
(2) To Reverse the Depreciation Associated with Asset Sold    
  XXXX General Ledger Account for Asset Depreciation $ XX.XX  
  9999 System Clearing   $ XX.XX
(3) To Reverse the Historical Cost of the Asset    
  9999 System Clearing $ XX.XX  
  XXXX General Ledger Account for Asset   $ XX.XX
(4) To Record the Gain    
  9999 System Clearing $ XX.XX  
  5100 GAAP Revenue Offset   $ XX.XX
–OR–
(4) To Record the Loss    
  5100 GAAP Revenue Offset $ XX.XX  
  9999 System Clearing   $ XX.XX

Governmental Funds

Modified to Full Accrual Adjustments for Capital Assets

Use the capital asset basis conversion adjustment (fund type 11) to convert governmental fund types from modified accrual to full accrual. For templates that can assist with the preparation of the capital asset adjustment (fund type 11) basis conversion entries, see Working Papers.

In governmental funds, sale of capital assets is a separate line item reported under “other financing sources (uses)” in the statement of revenues, expenditures and changes in fund balances. When the sale of capital assets is recorded as “revenues” (using T-code 179 or 195), the USAS entry must be reversed and recorded to “other financing sources (uses).”

Since the proceeds from the sale of a capital asset are typically appropriated, record the entries to adjust budget with T-codes 006 and 009 when your agency receives the money.

Use the following COBJs to record sales of capital assets:

*These COBJs only apply to a sale to an outside party and not to another state agency. For sales to another state agency, see Recording Interagency Transfers of Capital Assets.

Corrections Before Aug. 31, 20CY

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Appn No Fund Input GL
To Reverse Incorrect Deposit
(1) 2 J Current Date XXX 179 or 195 XX 99999 3XXX $ XX.XX R XXXXX XXXX N/A
To Record Other Financing Sources for Sale of Capital Asset
(2) 2 J Current Date XXX 191 XX 99999 3XXX $ XX.XX   XXXXX XXXX N/A

Accounting effect of above entries:

Debit Credit
(1) To Reverse Incorrect Deposit    
  5000 Revenue Control – Cash $ XX.XX  
  0045 Cash in State Treasury   $ XX.XX
  9060 Appropriation Control $ XX.XX  
  9055 Budgetary Fund Balance   $ XX.XX
(2) To Record Other Financing Sources for Sale of Capital Asset    
  0045 Cash in State Treasury $ XX.XX  
  5000 Revenue Control – Cash   $ XX.XX
  5100 GAAP Revenue Offset $ XX.XX  
  6035 Other Financing Sources   $ XX.XX

Corrections After Aug. 31, 20CY

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Appn No Fund Input GL
To Reverse Incorrect Revenue
(1) 5 U 0832CY XXX 630 XX 99999 3XXX $ XX.XX   N/A XXXX 9999
To Record Other Financing Sources for Sale of Capital Asset
(2) 5 U 0832CY XXX 657 XX 99999 3XXX $ XX.XX   N/A XXXX 9999

Accounting effect of above entries:

Debit Credit
(1) To Reverse Incorrect Revenue    
  5100 GAAP Revenue Offset $ XX.XX  
  9999 System Clearing   $ XX.XX
(2) To Record Other Financing Sources for Sale of Capital Asset    
  9999 System Clearing $ XX.XX  
  6035 Other Financing Sources   $ XX.XX

WARNING: System clearing must not have a balance after all transactions are entered.

Governmental Activities – Basis Conversion (Fund Type 11)

Agencies exempted from SPA and/or the General Provisions for Surplus and Salvage Property

*These COBJs only apply to a sale to an outside party and not to another state agency. For sales to another state agency, see Recording Interagency Transfers of Capital Assets

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Fund Input GL
To Reverse Cash Revenue for Sale of the Asset
(1) 5 U 0832CY XXX 516 CY 99999 XXX $ XX.XX   XXXX 9992
To Reverse the Depreciation Associated with Asset Sold
(2) 5 U 0832CY XXX 534 CY 99999 N/A $ XX.XX   XXXX XXXX
To Reverse the Historical Cost of the Asset
(3) 5 U 0832CY XXX 535 CY 99999 N/A $ XX.XX   XXXX XXXX
To Record the Gain
(4) 5 U 0832CY XXX 516 CY 99999 3834 $ XX.XX R XXXX 9992
–OR–
To Record the Loss
(4) 5 U 0832CY XXX 516 CY 99999 3834 $ XX.XX   XXXX 9992

Accounting effect of above entries:

Debit Credit
*This entry assumes that the original sale was recorded to cash revenue.
(1) To Reverse Cash Revenue for Sale of the Asset    
  6135* BC Other Financing Sources $ XX.XX  
  9992 BC System Clearing   $ XX.XX
(2) To Reverse the Depreciation Associated with Asset Sold    
  XXXX General Ledger Account for Asset Depreciation $ XX.XX  
  9992 BC System Clearing   $ XX.XX
(3) To Reverse the Historical Cost of the Asset    
  9992 BC System Clearing $ XX.XX  
  XXXX General Ledger Account for Asset   $ XX.XX
(4) To Record the Gain    
  9992 BC System Clearing $ XX.XX  
  6135 BC Other Financing Sources   $ XX.XX
–OR–
(4) To Record the Loss    
  6135 BC Other Financing Sources $ XX.XX  
  9992 BC System Clearing   $ XX.XX

Recording Sale of Surplus Capital Assets

Business-Type Activities (Fund Type 05)

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Fund Input GL
To Reverse Cash Revenue for Sale of the Asset
(1) 5 U 0832CY XXX 630 CY 99999 XXXX $ XX.XX   XXXX 9999
To Reverse the Depreciation Associated with Asset Sold
(2) 5 U 0832CY XXX 644 CY 99999 N/A $ XX.XX   XXXX XXXX
To Reverse the Historical Cost of the Asset
(3) 5 U 0832CY XXX 645 CY 99999 N/A $ XX.XX   XXXX XXXX
To Record the Gain
(4) 5 U 0832CY XXX 631 CY 99999 3834 $ XX.XX R XXXX 9999
–OR–
To Record the Loss
(4) 5 U 0832CY XXX 631 CY 99999 3834 $ XX.XX   XXXX 9999
To Record TFC fee (12%)**
(5) 5 U 0832CY XXX 628 CY 99999 7973 $ XX.XX   XXXX 9999

Accounting effect of above entries:

Debit Credit
*This entry assumes that the original sale was recorded to cash revenue.
** Prior May 1,2018 TFC fee was 10%
(1) To Reverse Cash Revenue Recorded for Sale of Asset    
  5100* GAAP Revenue Offset $ XX.XX  
  9999 System Clearing   $ XX.XX
(2) To Reverse the Depreciation Associated with Asset Sold    
  XXXX General Ledger Account for Asset Depreciation $ XX.XX  
  9999 System Clearing   $ XX.XX
(3) To Reverse the Historical Cost of the Asset    
  9999 System Clearing $ XX.XX  
  XXXX General Ledger Account for Asset   $ XX.XX
(4) To Record the Gain    
  9999 System Clearing $ XX.XX  
  5100 GAAP Revenue Offset   $ XX.XX
–OR–
(4) To Record the Loss    
  5100 GAAP Revenue Offset $ XX.XX  
  9999 System Clearing   $ XX.XX
(5) To Record TFC Fee (12%)**    
  6051 Transfer out-no post to tables $ XX.XX  
  9999 System Clearing   $ XX.XX

Governmental Activities – Basis Conversion (Fund Type 11)

Texas Facilities Commission (TFC) is required to report the full amounts of the sale proceeds to SPA. To account for the net proceeds in USAS, see Proceeds from the Sale of Surplus Property (FPP A.032). The difference is addressed in fund type 11, basis conversion.

Use COBJ 7973 to record the 12% TFC fee.

Use the Working Papers templates to assist with recording sale of surplus for capital assets (fund type 11).

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Fund Input GL
To Reverse Cash Revenue for Sale of the Asset
(1) 5 U 0832CY XXX 516 CY 99999 XXXX $ XX.XX   XXXX 9992
To Reverse the Depreciation Associated with Asset Sold
(2) 5 U 0832CY XXX 534 CY 99999 N/A $ XX.XX   XXXX XXXX
To Reverse the Historical Cost of the Asset
(3) 5 U 0832CY XXX 535 CY 99999 N/A $ XX.XX   XXXX XXXX
To Record the Gain
(4) 5 U 0832CY XXX 516 CY 99999 3834 $ XX.XX R XXXX 9992
–OR–
To Record the Loss
(4) 5 U 0832CY XXX 516 CY 99999 3834 $ XX.XX   XXXX 9992
To Record TFC fee (12%)**
(5) 5 U 0832CY XXX 517 CY 99999 7973 $ XX.XX R XXXX 9992

Accounting effect of above entries:

Debit Credit
*This entry assumes that the original sale was recorded to cash revenue.
** Prior May 1,2018 TFC fee was 10%
(1) To Reverse Cash Revenue Recorded for Sale of Asset    
  6135* BC Other Financing Sources $ XX.XX  
  9992 BC System Clearing   $ XX.XX
(2) To Reverse the Depreciation Associated with Asset Sold    
  XXXX General Ledger Account for Asset Depreciation $ XX.XX  
  9992 BC System Clearing   $ XX.XX
(3) To Reverse the Historical Cost of the Asset    
  9992 BC System Clearing $ XX.XX  
  XXXX General Ledger Account for Asset   $ XX.XX
(4) To Record the Gain    
  9992 BC System Clearing $ XX.XX  
  6135 GAAP Revenue Offset   $ XX.XX
–OR–
(4) To Record the Loss    
  6135 BC Other Financing Sources $ XX.XX  
  9992 BC System Clearing   $ XX.XX
(5) To Record TFC Fee (12%)**    
  6160 BC Other Financing Uses $ XX.XX  
  9992 BC System Clearing   $ XX.XX