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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 5 – Long-Term Liabilities
USAS Transaction Entries

Governmental Funds

The long-term liabilities adjustment fund type (FT12) is used to convert governmental fund types from modified accrual to full accrual. Enter the basis conversion entries for long-term liabilities in USAS using this fund type.

Instructions and working papers for the long-term liabilities adjustment (FT12) basis conversion entries are available in the AFR Working Papers. Disclose the source(s) of funds that will be used to liquidate the non-debt liabilities.

Business-Type Activity Funds

For business-type activities, the balances and activities are reported under full accrual accounting. Agencies are required to enter the balances and the activity into USAS to build the statement of net position and the statement of changes in revenues, expenses and net position. These entries report the account activity for each long-term liability. Do not reverse beginning balances and enter ending balances as transactions. Enter the actual liability activities for the year. Disclose the source(s) of funds that will be used to liquidate the non-debt liabilities.

Interest Expense Comptroller Objects

For governmental fund types, indirect interest expense for general long-term debt is presented on a separate line on the government-wide statement of activities (SOA). For business-type activities (proprietary fund types), interest is presented by function on the SOA, rather than on a separate line.

The following table illustrates the four COBJs used to report interest expense, their purpose, as well as the fund financial statement and the government-wide financial statement roll-ups.

 

COBJ COBJ Title Purpose Govt GSO Govt GSO Title Prop GSO Prop GSO Title CNP GSO CNP GSO Title GWFS GSO GWFS GSO Title
7801 Interest on
Gov’tl and
Fiduciary
Long-Term
Debt
To record the payment of indirect interest expense related to long-term debt. This includes interest expense not associated with a particular program on the GWFS. 0410 Interest – All General Long-Term Debt (presented on separate line) 1999 Back Out Not Applicable Expenditures 2680 Interest Expense 3585 Indirect Interest Expense on GLTD (presented on separate line)
7802 Interest Other To record the payment of other interest expense not related to long-term debt. In other words, related to current year accruals and not accrued in the previous year. For ex: interest paid on claims awarded in the current year. 0340 Other Expenditures (presented by function) 1230 Interest Expenditures and Fiscal Charges 2680 Interest Expense 3510 Interest Expense – Other (presented by function)
7814 Interest on
Proprietary
Long-Term
Debt –
Operating
To record interest expense on long-term debt associated with specific programs involving “program loans” that are made to individuals as defined by GASB 9. This COBJ is limited to agencies 305, 332 and 580 via an 8C edit. For use by proprietary funds only. 0910 Back Out Not Applicable Expenditures 1190 Interest Expenditures – Operating 2910 Back Out Not Applicable Expenditures 3580 Direct Interest Expense on GLTD (presented by function)
7815 Interest on
Long-Term
Debt –
Non-Operating
Governmental/
Proprietary –
Direct
For governmental funds, to record interest expense when the borrowing is essential to the creation or continued existence of a program; per GASB 34, paragraph 46, this type of interest expense is classified as “direct” for the GWFS. For proprietary funds, to record interest expense on long-term debt that is not defined as a program loan per GASB 9. 0410 Interest – All Long-Term Debt (presented on separate line) 1230 Interest Expenditures and Fiscal Charges 2910 Back Out Not Applicable Expenditure 3580 Direct Interest Expense on GLTD (presented by function)
Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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