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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

General Accounting

Modified to Full Accrual Adjustments
Basis Conversion Adjustments

Governmental funds report fund financial statements (FFS) on a modified accrual basis of accounting and government-wide financial statements (GWFS) on a full accrual basis of accounting. Three fund types in USAS are used to compile basis conversion information:

  • FT11 — capital asset adjustments
  • FT12 — long-term liabilities
  • FT21 — other adjustments

These fund types are presented in Exhibit I (Excel) and Exhibit II (Excel) of the AFR. There is a separate column for each fund type listed above. Basis conversion entries are required to convert the modified accrual basis to the full accrual basis. The entries and the accounting effect of these entries are presented below.

Capital Asset Adjustments (Fund Type 11)

In governmental funds, report capital assets at their historical cost and depreciated rather than reporting capital acquisitions as expenditures when incurred, as is done in proprietary funds. Capital assets and the adjustments associated with converting them from modified to full accrual basis are presented below. For more information, see Capital Assets and Working Papers.

Capital Asset Adjustments

Seq No Batch Type Doc Type Eff Date TC AY PCA COBJ Amount R Fund Input GL
* Agencies must use the Basis Conversion Capital Asset General Ledger Accounts.
To record a debit to a balance sheet account
(1) 5 U XX/XX/CY 534 CY 99999 NA XXX.XX NA 9998 XXXX*
To record a credit to a balance sheet account
(2) 5 U XX/XX/CY 535 CY 99999 NA XXX.XX NA 9998 XXXX*
To record a debit to a balance sheet account that reverses in the following year
(3) 5 U XX/XX/CY 536 CY 99999 NA XXX.XX NA 9998 XXXX*
To record a credit to a balance sheet account that reverses in the following year
(4) 5 U XX/XX/CY 537 CY 99999 NA XXX.XX NA 9998 XXXX*
To record a decrease in revenue activity
(5) 5 U XX/XX/CY 510 CY 99999 XXXX XXX.XX NA 9998 XXXX*
To record an increase in revenue activity
(6) 5 U XX/XX/CY 511 CY 99999 XXXX XXX.XX NA 9998 XXXX*
To record an increase in expenditure activity
(7) 5 U XX/XX/CY 512 CY 99999 XXXX XXX.XX NA 9998 XXXX*
To record a decrease in expenditure activity
(8) 5 U XX/XX/CY 513 CY 99999 XXXX XXX.XX NA 9998 XXXX*
To record Other Financing Source/Use activity
(9) 5 U XX/XX/CY 516 CY 99999 XXXX XXX.XX   9998 XXXX*
To record Restatement activity (this should not be used frequently)
(10) 5 U XX/XX/CY 518 CY 99999 3891 XXX.XX   9998 XXXX*

Accounting effect of above entries:

Debit Credit
Note: BC System Clearing GL 9992 cannot have a balance at the D23 agency fund level after the above entries.
(1) To record a debit to a balance sheet account    
  XXXX   BC Input GL $ XX.XX  
  9992   BC System Clearing   $ XX.XX
(2) To record a credit to a balance sheet account    
  9992   BC System Clearing $ XX.XX  
  XXXX   BC Input GL   $ XX.XX
(3) To record a debit to a balance sheet account that reverses in the following year    
  XXXX   BC Input GL $ XX.XX  
  9992   BC System Clearing   $ XX.XX
(4) To record a credit to a balance sheet account that reverses in the following year    
  9992   BC System Clearing $ XX.XX  
  XXXX   BC Input GL   $ XX.XX
(5) To record a decrease in revenue activity    
  5150   BC Revenue Control $ XX.XX  
  XXXX   BC Input GL   $ XX.XX
(6) To record an increase in revenue activity    
  XXXX   BC Input GL $ XX.XX  
  5150   BC Revenue Control   $ XX.XX
(7) To record an increase in expenditure activity    
  5650   BC Expenditure Control $ XX.XX  
  XXXX   BC Input GL   $ XX.XX
(8) To record a decrease in expenditure activity    
  XXXX   BC Input GL $ XX.XX  
  5650   BC Expenditure Control   $ XX.XX
(9) To record Other Financing Source/Use activity    
  6135   BC Other Financing Sources $ XX.XX  
  XXXX   BC Input GL   $ XX.XX
(10) To record Restatement activity (this should not be used frequently)    
  XXXX   BC Input GL $ XX.XX  
  6175   BC Restatements   $ XX.XX

Long-Term Liabilities Adjustments (Fund Type 12)

In governmental funds, make entries in USAS to record general long-term liabilities not due and payable in the current period. Long-term liabilities and the adjustments associated with converting them from modified to full accrual basis are presented below. Instructions for completing the long-term liabilities basis conversion entries can be found in Working Papers. For more information, see Note 5 – Long-Term Liabilities and Working Papers.

Long-Term Liabilities Adjustments

Seq No Batch Type Doc Type Eff Date TC AY PCA COBJ Amount R Fund Input GL
* Agencies must use the Basis Conversion Long-Term Liability General Ledger Accounts.
To record a debit to a balance sheet account
(1) 5 U XX/XX/CY 534 CY 99999 NA XXX.XX NA 9997 XXXX*
To record a credit to a balance sheet account
(2) 5 U XX/XX/CY 535 CY 99999 NA XXX.XX NA 9997 XXXX*
To record a debit to a balance sheet account that reverses in the following year
(3) 5 U XX/XX/CY 536 CY 99999 NA XXX.XX NA 9997 XXXX*
To record a credit to a balance sheet account that reverses in the following year
(4) 5 U XX/XX/CY 537 CY 99999 NA XXX.XX NA 9997 XXXX*
To record an increase in expenditure activity
(5) 5 U XX/XX/CY 502 CY 99999 XXXX XXX.XX NA 9997 XXXX*
To record a decrease in expenditure activity
(6) 5 U XX/XX/CY 503 CY 99999 XXXX XXX.XX NA 9997 XXXX*
To record an increase in expenditure activity that reverses in the following year
(7) 5 U XX/XX/CY 504 CY 99999 XXXX XXX.XX NA 9997 XXXX*
To record a decrease in expenditure activity that reverses in the following year
(8) 5 U XX/XX/CY 505 CY 99999 XXXX XXX.XX NA 9997 XXXX*
To record Other Financing Source/Use activity
(9) 5 U XX/XX/CY 516 CY 99999 XXXX XXX.XX   9997 XXXX*
To record Restatement activity (this should not be used frequently)
(10) 5 U XX/XX/CY 518 CY 99999 3891 XXX.XX   9997 XXXX*

Accounting effect of above entries:

Debit Credit
Note: BC System Clearing GL 9992 cannot have a balance at the D23 agency fund level after the above entries.
(1) To record a debit to a balance sheet account    
  XXXX   BC Input GL $ XX.XX  
  9992   BC System Clearing   $ XX.XX
(2) To record a credit to a balance sheet account    
  9992   BC System Clearing $ XX.XX  
  XXXX   BC Input GL   $ XX.XX
(3) To record a debit to a balance sheet account that reverses in the following year    
  XXXX   BC Input GL $ XX.XX  
  9992   BC System Clearing   $ XX.XX
(4) To record a credit to a balance sheet account that reverses in the following year    
  9992   BC System Clearing $ XX.XX  
  XXXX   BC Input GL   $ XX.XX
(5) To record an increase in expenditure activity    
  5650   BC Expenditure Control $ XX.XX  
  XXXX   BC Input GL   $ XX.XX
(6) To record a decrease in expenditure activity    
  XXXX   BC Input GL $ XX.XX  
  5650   BC Expenditure Control   $ XX.XX
(7) To record an increase in expenditure activity that reverses in the following year    
  5650   BC Expenditure Control $ XX.XX  
  XXXX   BC Input GL   $ XX.XX
(8) To record a decrease in expenditure activity that reverses in the following year    
  XXXX   BC Input GL $ XX.XX  
  5650   BC Expenditure Control   $ XX.XX
(9) To record Other Financing Source/Use activity    
  6135   BC Other Financing Sources $ XX.XX  
  XXXX   BC Input GL   $ XX.XX
(10) To record Restatement activity (this should not be used frequently)    
  XXXX   BC Input GL $ XX.XX  
  6175   BC Restatements   $ XX.XX

Other Adjustments (Fund Type 21)

Use the Other Adjustments column to reconcile total governmental fund balances to net position of governmental activities in the statement of net position (modified to full accrual basis). Other Adjustments includes but is not limited to adjustments such as unearned revenue and prepaid items.

For balance sheet basis conversion to statement of net position:

  • Present increases as a positive amount, normally impacting unrestricted net position.
  • Present decreases as a negative amount, normally impacting unearned revenue.

For statement of revenues, expenditures and changes in fund balance basis conversion to statement of activities:

  • Present increases as a positive amount, normally impacting revenue.
  • Present decreases as a negative amount, possibly impacting revenue.
Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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