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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
Sample (Illustrative, may not tie to exhibits)

Changes In Long-Term Liabilities

The following changes occurred in liabilities during the year ending Aug. 31, 20CY:

Governmental Activities Balance
09/01/PY
Additions Reductions Restatement/
Adjustment**
Balance
08/31/CY
Amounts Due Within One Year Amounts Due Thereafter
Claims and Judgments $ 274,987.52 $ 99,877.76 $ 199,542.35   $ 175,322.93 $ 15,572.42 $ 159,750.51
Capital Lease Obligations 57,500.76 *1,243.88 6,485.09   52,259.55 5,111.87 47,147.68
Employees’ Compensable Leave 654,987.76 120,250.52 160,000.45   615,237.83 120,251.88 494,985.95
Notes and Loans Payable 0.00 400,100.65 0.00   400,100.65 0.00 400,100.65
General Obligation Bonds Payable 4,779,098.87 1,528,682.12 1,000,000.00   5,307,780.99 75,789.09 5,231,991.90
Revenue Bonds Payable 1,900,334.76 0.00 940,446.95 (9,000.00) 950,887.81 22,983.25 927,904.56
Pollution Remediation Obligations 100,000.00 50,000.56 0.00   150,000.56 0.00 150,000.56
Total Governmental Activities $7,766,909.67 $2,200,155.49 $2,306,474.84 $(9,000.00) $7,651,590.32 $239,708.51 $7,411,261.81
Business-Type Activities Balance
09/01/PY
Additions Reductions Restatement/
Adjustment**
Balance
08/31/CY
Amounts Due Within One Year Amounts Due Thereafter
Claims and Judgments $ 496,987.44 $ 100,000.00 $ 350,695.86   $ 246,291.58 $ 25,055.24 $ 221,236.34
Capital Lease Obligations 2,509.87 0.00 1,447.69   1,062.18 142.69 919.49
Employees’ Compensable Leave 8,698.55 6,658.65 7,310.11   8,047.09 6,658.37 1,388.72
Notes and Loans Payable 20,098.43 106,985.45 14,415.76   112,668.12 0.00 112,668.12
General Obligation Bonds Payable 550,539.49 60,246.78 512,985.43 6,000.00 103,800.84 60,246.36 43,554.48
Revenue Bonds Payable 1,087,650.98 45,000.00 169,867.83   962,783.15 45,785.25 916,997.90
Pollution Remediation Obligations 200,476.25 10,000.63 0.00   210,476.88 3,168.66 207,308.22
Liabilities Payable from Restricted Assets 347,285.96 40,596.00 15,056.37   372,825.59 15,985.55 356,840.04
Total Business-Type Activities $2,714,246.97 $369,487.51 $1,071,779.05 $6,000.00 $2,017,955.43 $157,042.12 $1,860,913.31
Component Units Balance
09/01/PY
Additions Reductions Restatement/
Adjustment**
Balance
08/31/CY
Amounts Due Within One Year Amounts Due Thereafter
Capital Lease Obligations $ 256.96 $ 288.65 $ 227.13   $ 318.48 $ 115.69 $ 202.79
Employees’ Compensable Leave 4,291.84 10,799.43 10,516.61   4,574.66 2,576.11 1,998.55
Notes and Loans Payable 195,267.67 246,944.73 257,530.16   184,682.24 5,699.63 178,982.61
Revenue Bonds Payable 209,595.38 78,183.99 25,630.90   262,148.47 56,475.22 205,673.25
Liabilities Payable from Restricted Assets 210,566.57 41,140.36 34,567.96   217,138.97 50,476.56 166,662.41
Total Component Units $619,978.42 $377,357.16 $328,472.76   $668,862.82 $115,343.21 $553,519.61

*Must tie to Exhibit II, total Governmental Funds column, “Increase in Obligations – Capital Leases“ line item.

**Report amortization of premiums and discounts along with restatements and any other adjustments in the “Restatement/Adjustment” column.

Note: Each agency, independent university and university system must enter the liability transactions into USAS to support amounts reported in this note. Report actual transactions (not reversal of beginning balance and addition of ending balance).

Important: Enter all amounts as dollars and cents.

Notes and Loans Payable

Notes payable consists of amounts used to finance the acquisition of mainframe computer equipment. The debt service requirements for notes payable in the governmental and business-type activities are as follows:

Notes Payable Debt Service Requirements
  Governmental Activities Business-Type Activities Discretely Presented Component Units
Year Principal Interest Total Principal Interest Total Principal Interest Total
XXX1 $ 20,320.62 $ 27,010.12 $ 47,330.74 $ 2,081.65 $ 1,052.63 $ 3,134.28 $ 598.95 $ 1,398.42 $ 1,997.37
XXX2 18,565.12 25,635.76 44,200.88 2,181.10 915.74 3,096.84 652.31 1,215.43 1,867.74
XXX3 24,683.34 24,400.66 49,084.00 2,500.93 765.56 3,266.49 765.91 1,175.96 1,941.87
XXX4 16,357.51 22,720.96 39,078.47 2,200.15 595.34 2,795.49 845.66 1,125.47 1,971.13
XXX5 22,981.96 21,615.37 44,597.33 2,000.08 450.13 2,450.21 976.23 1,075.63 2,051.86
XXX6-XX10 16,688.55 60,180.68 76,869.23 2,100.39 945.51 3,045.90 6,575.62 3,045.42 9,621.04
XX11-XX15 12,456.15 56,800.27 69,256.42 2,000.52 510.82 2,511.34 8,500.45 1,725.91 10,226.36
XX16-XX20 268,506.85 54,375.94 322,882.79 523.45 105.63 629.08 0.00 0.00 0.00
Totals $ 400,560.10 $ 292,739.76 $ 693,299.86 $ 15,588.27 $ 5,341.36 $ 20,929.63 $ 18,915.13 $ 10,762.24 $ 29,677.37

Important: Enter all amounts as dollars and cents.

Variable rate interest equaled 6.125 percent at Aug.31 20CY and will fluctuate based upon current market conditions.

Claims and Judgments

Sample Agency was involved in litigation regarding an employee dispute. The settlement of $125,000 was accrued but unpaid as of Aug. 31, 20CY.

Employees’ Compensable Leave

If a state employee had continuous employment with the state for at least six months, the state employee is entitled to be paid for all unused vacation time accrued in the event of the employee’s resignation, dismissal or separation from state employment.

Expenditures for accumulated annual leave balances are recognized in the period paid or taken in governmental fund types. For these fund types, the liability for unpaid benefits is recorded in the statement of net position. Both an expense and a liability for business-type activities are recorded in the proprietary funds as the benefits accrue to employees. No liability is recorded for non-vesting employees accumulating rights to receive sick pay benefits. This obligation is usually paid from the same funding source(s) from which the employee’s salary or wage compensation was paid.

Pollution Remediation Obligations

Sample Agency is responsible for the cleanup of leaking petroleum storage tanks and is currently managing five active sites. Sample Agency calculates expected outlays related to this pollution remediation by calculating the average cost of cleanup and multiplying that cost by the number of active sites. Sample Agency has over 20 years of experience in estimating these types of cleanups. The amount of the estimated pollution remediation liability assumes there will be no major increases in the cost of providing these cleanup services.

Recoveries are made through fees assessed for the delivery of petroleum products and federal funding formulated to offset the costs of petroleum storage tank cleanups. Realizable recoveries are recognized as cash on the balance sheet and revenues on the operating statement. Sample Agency estimated that $300,000 of expected recoveries will be made. These expected recoveries reduced the recorded pollution remediation obligation and related expense.

Liabilities Payable from Restricted Assets

Sample Agency has long-term liabilities associated with the acquisition of restricted assets or has long-term liabilities that will be liquidated with restricted assets. These liabilities are classified as liabilities payable from restricted assets.

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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