Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Resources

Agency Fiscal Year-End USAS Adjustments and AFR Checklist
Step 8 – Notes to the Financial Statements

• Note 1
• Note 2
• Note 3
• Note 4
• Note 5
• Note 6
• Note 7
• Note 8
• Note 9
• Note 10
• Note 11
• Note 12
• Note 13
• Note 14
• Note 15
• Note 16
• Note 17
• Note 18
• Note 19
• Note 20
• Note 22
• Note 23
• Note 24
• Note 25
• Note 26
• Note 27
• Note 28
• Note 29
• Note 30
• Note 31
• Note 32
• View All

Note 14 – Adjustments to Beginning Net Position, Fund Balances or Fund Net Position (Submitted through the RNSS web application)

1. Note 14 is required if the agency has a restatement on the financial statements because one of the following occurred:
   1. Change in accounting principle
   2. Change in accounting estimate
   3. Change to or within the reporting agency
   4. Correction of error(s) in previously issued financial statements
2. If the agency made an accounting change for a change in accounting principle, disclose the following:
   1. The nature of the change. For adoption of a new principle, identify the line items (excluding totals) in the affected financial statements. For the implementation of a new pronouncement, identity the new pronouncement.
   2. An explanation of why the new treatment is considered preferable (unless the agency is implementing a new pronouncement).
   3. If applicable, an explanation of why it is not practicable (inconvenience does not meet the threshold) for the agency to restate prior periods presented (for agencies issuing comparative financial statements).
3. If the agency made an accounting change for a change in accounting estimate, disclose the following:
   1. The nature of the change and identification of the line items (excluding totals) in the affected financial statements.
   2. If the change in estimate is a result of a change in the measurement methodology, an explanation of why the new measurement methodology is considered preferable (unless the change is required by a pronouncement).
4. If the agency made an accounting change for a change to or within the financial reporting entity, disclose the following:
   1. The nature of the change.
   2. The reason for the change (except for changes in major funds due to meeting or not meeting quantitative thresholds).
5. If the beginning position was restated due to an error correction, disclose the following:
   1. The nature of the error, the periods affected by the error, and identification of the line items, excluding totals, in the affected financial statements.
   2. The effect (at both the government-wide and fund levels) on the amount reported for changes in net position/fund balance in the previous period if only one period is presented, or on the prior periods presented if more than one period is presented.
6. The agency must provide details in a table that reconciles the beginning position previously reported in the financial statements to the adjusted or restated beginning position. The table must summarize each amount that changed and that is included in the aggregated amount displayed on the face of the statements, by type of accounting change, error correction, and reporting unit.

   Note: The table is only needed if there are multiple accounting changes and/or errors that are not displayed individually on the face of the basic financial statement(s).

7. Ensure the note clearly states the reason and amount for each restatement. This is extremely important for general revenue (fund 0001) restatements made for prior year appropriation activity.

   Note: This information is used in the formula for determining if the agency has correctly stated legislative appropriations on the financial statements.

8. Ensure the restatement amount in USAS equals the restatement amounts in all of the applicable web applications.
9. Submit a copy of the agency’s Note 14 from its published AFR through the RNSS web application. The required format is a Microsoft Word document (latest version: docx) with header information that includes: agency name/number and note number/name. If Note 14 contains a table, include the table in the Word document — rather than as a separate Excel document or other database application file. If Note 14 does not apply, do NOT submit a note to indicate “not applicable.”