Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 6 – Bonded Indebtedness
Schedule 2F – Early Extinguishment and Refunding

Schedule 2F — Early Extinguishment and Refunding discloses early extinguishment and refunding for the current fiscal year. Separate and identify each bond series issued as described in Schedule 2A. Disclose the following in the hard copy Schedule 2F and in the BRS web application, where applicable.

• Description of issue — The exact title, series and calendar year of the bond as presented for other bond schedules. Avoid abbreviations if possible.
• Category:
  • Advanced refunding
  • Cash defeasance only (GASB 86)
  • Current refunding
  • Current and advanced refunding*
  • Early extinguishment
• Amount extinguished or refunded — The amount extinguished for early extinguishment or par value refunded for refunding
• For refundings only — Disclose the following for advance refundings and current refundings:
  • Refunding Issue Par Value — The par value of the new debt issued to refund the old issue. If only a part of the new debt relates to the refunding, disclose only that part and disclose remainder in a footnote on this schedule and in BRS, in Section 4’s COMMENTS field.
  • Cash flow increase (decrease) — The difference between the cash flows required to service the new debt in comparison to the old debt. This is the sum of all future interest and principal payments that would have been paid by the entity, less all future interest and principal payments to be paid for the new debt, plus any additional resources required (if any).
  • Economic gain (loss) — The calculated difference between the present value of cash flow requirements of the old debt and the present value of cash flow requirements of the new debt. If a loss occurs, provide an explanation of the reasons for the extinguishment (such as to remove prohibitive bond covenant restrictions) in a footnote on this schedule and in BRS, in Section 4’s COMMENTS field.
  • Non-debt cash to defeased bond escrow — The amount of in substance defeasance of debt using only existing resources. Disclose the reasons for the defeasance, the substitution of essentially risk-free monetary assets with monetary assets that are not essentially risk-free in the period in which debt is defeased in substance, if applicable, in a footnote on this schedule and in BRS, in Section 4’s COMMENTS field. For more information, see Certain Debt Extinguishment Issues.
  • Amounts placed with escrow agent — The amount cash and/or other resources placed with an escrow agent.
  • Cash flows required to service defeased debt — The cash flows required to service the defeased debt.
  • Gain/(loss) from cash defeasance — The amount of gain or loss from cash defeasance. If the reason for the defeasance is cost considerations, disclose the amount of interest savings in a footnote on this schedule and in BRS, in Section 4’s COMMENTS field.

Attention: For required note disclosures for bonded indebtedness, see Note 6: Bonded Indebtedness.

GASB 88 requires agencies to disclose direct borrowings and direct placements of debt separately from all other debt. For more information, see Direct Borrowings and Direct Placements.

*Report bond refunding transactions with both current refunding and advanced refunding separately in the agency’s AFR Schedule 2F.