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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Pass-Through Activity

Notes to SEFA
Note 7: Federal Deferred Revenue

Unearned revenues related to federal programs include:

  • Prepaid federal grants that were not earned by fiscal year-end.
  • Governmental funds only – Federal revenue that was earned but not available at fiscal year-end. (On the modified accrual basis, revenue is available if it can be collected within approximately 60 days.)

Disclose the following balances of deferred revenues related to federal grants by CFDA numbers:

  • Beginning balance at Sept. 1, 20PY
  • Net change during the fiscal year
  • Ending balance at Aug. 31, 20CY

Agencies are required to provide a detailed explanation for all unearned revenue recorded in SEFA Note 7.

Agencies providing the reason of “earned but not available” should note that this type of unearned revenue is only recognized in the governmental fund types and must be converted to federal revenue in the government-wide financial statements.

Note: Universities are exempt from Note 7.

Per GASB 65, the use of the term “deferred” is only used when referring to “deferred inflows of resources” or “deferred outflows of resources.” As a result, “deferred revenue” is now “unearned revenue” and “deferred costs” is now “prepaid costs.” The term “deferred” was not changed in the SEFA to be in compliance with Uniform Guidance (formerly Office of Management and Budget [OMB] Circular A-133).

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