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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 6 – Bonded Indebtedness
Bonds Payable Disclosures

Present detailed disclosures on each outstanding bond issue in the following required format:

  • Bond issue name, series XXXX
  • Purpose of the bond issue (for example, to construct a building)
  • Original par value of issue
  • Issue date (MM-DD-YYYY)
  • Type of bond (general obligation or revenue)
  • Report in governmental activities, business-type activities or discrete component units
  • Source of revenue for debt service (for example, fund 0001 appropriations, rental or loan repayments)
  • Changes in debt
  • Authorized but unissued bond debt
  • Disclose any other significant policies or requirements related to the bond issue

Attention: Disclose each bond issue’s description consistently until and including the year the debt is extinguished or retired.

Authorized but Unissued at Fiscal Year-End

Debt is authorized when all legal steps are taken by the issuer for its authorization for issuance (such as the required approval by the governing body or the voters). Minor administrative performance normally is not regarded as the authorization of debt. Separate general obligation bonds and revenue bonds into either self-supporting or non-self-supporting categories.

Disclose amounts authorized but unissued as of the balance sheet date as:
($XXX,XXX,XXX.xx authorized — $XXX,XXX,XXX.xx issued)

Disclose amounts authorized and all have been issued as:
($XXX,XXX,XXX.xx — all authorized have been issued)

Disclosure for Early Extinguishment and Refunding (including current and advance)

For current year’s early extinguished debt and refunded debt, disclose the following:

  • Description of transaction
  • Amount and type of debt extinguished or refunded
  • Amount and source of funds used for extinguishment or refunding
  • Total proceeds of the issue (disclose issuance costs, underwriter discounts, etc.)

Definition of Early Extinguishment

Early extinguishment (including a refunding discussed in the next paragraph) is the elimination of debt either through reacquisition or defeasance prior to maturity. The debt may be extinguished by using existing assets or by using the proceeds from new debt. Both open market and mandatory reacquisitions are considered early extinguishments.

Definition of Refunding

Replacing one debt with other debt is called “refunding.” In an advance refunding, new debt is issued to pay off interest and principal of old debt 90 days or more before the maturity or call dates of the old debt. For a current refunding, old debt must be callable within 90 days of the refunding. For more information, see Accounting for Early Extinguishments and Advanced Refunding.

Glenn Hegar
Texas Comptroller of Public Accounts
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