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Lesson 7: SPA Entity Fiscal Year and Componentization Transcript


Welcome to the Fiscal Management online training video for the State Property Accounting (SPA) overview of the entity fiscal year (EFY) concept and componentization of assets.

After viewing this training, you should have a thorough understanding of:

  • The SPA structure of entity fiscal year layers
  • The organization of SPA assets by the component level

Entity Fiscal Year (EFY)

GASB Statements 34 and 35 require governments to capitalize and depreciate their capital assets. Agencies should be aware of the definition the Texas Comptroller of Public Accounts (Comptroller's office) uses for a depreciable entity fiscal year, also known as the EFY.

The entity fiscal year is the fiscal year the expenditure is recorded. The EFY is defined as the sum of financial transactions affecting each component of a property number within a single fiscal year.

Each EFY exists as a "layer" of the asset component in SPA so capitalization can be determined and depreciation can be correctly charged to the asset component. Depreciation is calculated at the entity fiscal year level and allocated between all funds of a component based on each fund’s percentage of the component’s value.

The EFY represents the level where capitalization factors such as useful life, historical indicator, residual percentage and depreciation indicator are evaluated.

Entity Fiscal Year (EFY)

For instance, if component 01 of property 123 was initially added to the SPA system on Sept. 1, 2010 (fiscal year 2011) with a value of $5,000, the asset would appear in SPA with one entity fiscal year layer of 2011.

123 01 2011 ASSET C $5,000.00

Now let’s say that $2,000 of ancillary costs was added to the asset in October 2010 (also fiscal year 2011). Now the total value of the depreciable entity is $7,000, all in entity fiscal year 2011.

123 01 2011 ASSET C $7,000.00

If an additional $5,000 value is added to component 01 of property 123 on Sept. 1, 2011 (now fiscal year 2012), a new depreciable entity would be created.

123 01 2011 ASSET C $7,000.00
123 01 2012 ASSET C $5,000.00

This new depreciable entity relates to the same component 01 of property 123, but represents the financial transactions of a different fiscal year — 2012.

Each depreciable entity may have most of the same depreciable factors but different beginning points for depreciation calculations. Therefore, for a single component, one depreciable entity (or “layer”) may be fully depreciated, while another depreciable entity (representing a later fiscal year) may still be depreciating.


Componentization is the process of separately calculating the depreciation of different asset elements that are part of one overall property number. A component number is the number assigned to one element of a single property record. The components of a property are treated as a single unit.

The benefits of componentization are that all different property elements can share the same overall property number and each property number can have up to 99 components. Also, componentization allows for easier disposal of pieces of the asset as each property number and component combination is treated uniquely in SPA.


Let’s look at an example of componentization. For instance, if your agency buys a boat, the boat and motor can be treated as two components under the same property number. Property 12345, component 01 is the boat itself, and Property 12345, component 02 is the motor of the boat. Adding the motor as a separate component makes it easier to replace the motor in the future by disposing of Component 02 and adding a new motor under Component 03.


To continue the example, let’s say the motor breaks down and must be replaced. Property number 12345, component 02 (the old motor) is disposed as salvage with a disposal method 03. The replacement motor can now be added as a new component — component 03 — to the same property number — 12345.

Note that you cannot make the new motor component 02 because property numbers (and property number/component combinations) cannot be repeated in SPA.

Depreciation on the new motor begins on the date the asset is placed into service, as opposed to the depreciation on the boat itself that began when the boat was placed in service


Thank you for viewing this presentation. This concludes the SPA training on SPA entity fiscal year and componentization.

For more SPA training and other Fiscal Management training opportunities, log on to Training Center on FMX.

Glenn Hegar
Texas Comptroller of Public Accounts
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