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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

Notes & Samples

NOTE 7 – Derivative Instruments
Accounting for Derivative Instruments in USAS

When an agency determines a derivative instrument to be effective, establish a derivative instrument asset/liability and corresponding deferred inflows/outflows account. Changes in fair value of effective hedging derivative instruments are recognized through the application of hedge accounting.

Derivative instruments are reported as investments if the derivative instrument is entered into for investment purposes or is an ineffective hedge. Changes in the fair value of investment derivative instruments flow through investment income.

Report derivative instruments associated with governmental funds in the basis conversion general ledger accounts. These amounts are not reported in the governmental fund statements, but are included in the government-wide financial statements.

Use the following USAS general ledger accounts for recording hedging derivative instruments in accordance with GASB 53.

Derivative Instruments General Ledger Accounts – Proprietary and Fiduciary Funds

Hedging Derivative Instruments

  • GL 1143 – CL Hedging Derivative Instrument Liabilities
  • GL 1471 – NC Hedging Derivative Instrument Liabilities
  • GL 0170 – CA Hedging Derivative Instrument Assets
  • GL 0481 – NC Hedging Derivative Instrument Assets
  • GL 0482 – Deferred Outflows of Resources
  • GL 1472 – Deferred Inflows of Resources

Investment Derivative Instruments

  • GL 0059 – CA ST INV – Derivative Instruments
  • GL 0105 – NC INV – Derivative Instruments

Other Derivative Instruments

  • GL 1148 – CL Other Derivative Instrument Liabilities
  • GL 1378 – NC Other Derivative Instrument Liabilities
  • GL 0186 – CA Other Derivative Instrument Assets
  • GL 0486 – NC Other Derivative Instrument Assets

Derivative Instruments General Ledger Accounts – Basis Conversion

Hedging Derivative Instruments

  • GL 1543 – BC CL Hedging Derivative Instrument Liabilities
  • GL 1971 – BC NC Hedging Derivative Instrument Liabilities
  • GL 0570 – BC CA Hedging Derivative Instrument Assets
  • GL 0781 – BC NC Hedging Derivative Instrument Assets
  • GL 0782 – BC Deferred Outflows of Resources
  • GL 1972 – BC Deferred Inflows of Resources

Investment Derivative Instruments

  • GL 0559 – BC CA INV – Derivative Instrument Assets
  • GL 0705 – BC NC INV – Derivative Instruments Assets

Other Derivative Instruments

  • GL 1548 – BC CL Other Derivative Instrument Liabilities
  • GL 1978 – BC NC Other Derivative Instrument Liabilities
  • GL 0586 – BC CA Other Derivative Instrument Assets
  • GL 0786 – BC NC Other Derivative Instrument Assets