Occasionally, financial statements require adjustments for events that
occurred in previous periods or for changes in accounting principles.
Statement of Federal Financial Accounting Standards (SFFAS) number 7,
Revenue and Other Financing Sources, addresses such changes, which are
prior period adjustments. These changes are limited to corrections of
errors and changes with retroactive effect[^1]. The standard states the
"...adjustments should be recognized as a change in cumulative results
of operations...."[^2] Further, "prior period financial statements
should not be restated for prior period adjustments recognized in the
current period." When financial statements containing material
accounting errors are presented on a comparative basis, the auditors
would have to qualify their opinion and the information is confusing to
readers of the statements. In SFFAS number 21, Reporting Corrections of
Errors and Changes in Accounting Principles, the Federal Accounting
Standards Advisory Board (FASAB) amended its position. "...Reporting
entities are required to restate prior period financial statements for
material errors discovered in the current period, if such statements are
provided for comparative purposes, and if the effect would be material
to the financial statements of either period."[^3] Prior period
financial statements should not be restated for changes in accounting
principles unless otherwise directed by the new accounting standard.

This document provides guidance for recording transactions related to
adjustments of a prior period financial activity. The transactions are
related to the following:

-   Changes in accounting principle;

-   Corrections of material errors requiring financial statement
    restatement; and,

-   Corrections of non-material errors that do not require financial
    statement restatement.

##### Approved USSGL Accounts 

##  Unexpended Appropriations -- Prior-Period Adjustments -- Restated 

> 5708 Expended Appropriations -- Prior-Period Adjustments -- Restated

###### 5709 Expended Appropriations -- Prior-Period Adjustments -- Not Restated

> 7401 Prior-Period Adjustments - Restated

###### [Changes to Existing USSGL Accounts]{.underline}

3109 Unexpended Appropriations -- Prior-Period Adjustments -- **Not
Restated**

7400. Prior-Period Adjustments -- **Not Restated**

***Note**: All USSGL accounts noted above crosswalk to line 2 of the
current Statement of Changes in Net Position.*

**Pre-Closing Trial Balance -- 2000:**

+------------------------------+----------------+----------------------+
| ### USSGL Account            | ### Debit      | ### Credit           |
+------------------------------+----------------+----------------------+
| 1010 Fund Balance w/         | 10,000         |                      |
| Treasury                     |                |                      |
+------------------------------+----------------+----------------------+
| 1310 Accounts Receivable,    | 2,000          |                      |
| Federal                      |                |                      |
+------------------------------+----------------+----------------------+
| 2110 Accounts Payable        |                | 1,000                |
+------------------------------+----------------+----------------------+
| 3100 Unexpended              |                | 9,000                |
| Appropriations               |                |                      |
+------------------------------+----------------+----------------------+
| 3310 Cumulative Results      |                | 0                    |
+------------------------------+----------------+----------------------+
| 5100 Revenue from Services   |                | 2,000                |
| Provided                     |                |                      |
+------------------------------+----------------+----------------------+
| 5700 Expended Appropriation  |                | 1,000                |
+------------------------------+----------------+----------------------+
| 6100 Operating/Program       | 1,000          |                      |
| Expenses                     |                |                      |
+------------------------------+----------------+----------------------+
| 4201 Total Actual Resources  | 10,000         |                      |
| -- Collected                 |                |                      |
+------------------------------+----------------+----------------------+
| 4251 Reimbursements and      | 2,000          |                      |
| Other Income Earned          |                |                      |
| Receivable                   |                |                      |
+------------------------------+----------------+----------------------+
| 4901 Delivered Orders --     |                | 1,000                |
| Obligations, Unpaid          |                |                      |
+------------------------------+----------------+----------------------+
| 4450 Unapportioned Authority |                | 11,000               |
+------------------------------+----------------+----------------------+
| **Total**                    | 25,000         | 25,000               |
+------------------------------+----------------+----------------------+

## Post-Closing Trial Balance -- 2000:

+------------------------------+----------------+----------------------+
| ### USSGL Account            | ### Debit      | ### Credit           |
+------------------------------+----------------+----------------------+
| 1010 Fund Balance w/         | 10,000         |                      |
| Treasury                     |                |                      |
+------------------------------+----------------+----------------------+
| 1310 Accounts Receivable,    | 2,000          |                      |
| Federal                      |                |                      |
+------------------------------+----------------+----------------------+
| 2110 Accounts Payable        |                | 1,000                |
+------------------------------+----------------+----------------------+
| 3100 Unexpended              |                | 9,000                |
| Appropriations               |                |                      |
+------------------------------+----------------+----------------------+
| 3310 Cumulative Results      |                | 2,000                |
+------------------------------+----------------+----------------------+
| 4201 Total Actual Resources  | 10,000         |                      |
| -- Collected                 |                |                      |
+------------------------------+----------------+----------------------+
| 4251 Reimbursements and      | 2,000          |                      |
| Other Income Earned          |                |                      |
| Receivable                   |                |                      |
+------------------------------+----------------+----------------------+
| 4901 Delivered Orders --     |                | 1,000                |
| Obligations, Unpaid          |                |                      |
+------------------------------+----------------+----------------------+
| 4450 Unapportioned Authority |                | 11,000               |
+------------------------------+----------------+----------------------+
| **Total**                    | 24,000         | 24,000               |
+------------------------------+----------------+----------------------+

FY 2001:

+----------------------+-----------------------------------------------+
| #                    | **Accounting Transaction**                    |
|  **Financial Event** |                                               |
+----------------------+-----------------------------------------------+
| Agency allots the    | Dr. 4450 Unapportioned Authority 11000        |
| unobligated balance  |                                               |
| carried forward.     | Cr. 4610 Allotment-Realized Resources 11000   |
+----------------------+-----------------------------------------------+
| Expenses were found  | Dr. 4610 Allotments-Realized Resources 2000   |
| to be understated    |                                               |
| during FY 2000 by \$ | Cr. 4981 Up Adj. of PY Undel.                 |
| 2000. This is        | Orders,Obligations-Unpaid 2000                |
| material and         |                                               |
| requires             | Dr. 7401 Prior Period Adjustment-Restated     |
| restatement.         | 2000                                          |
|                      |                                               |
|                      | Cr. 2110 Accounts Payable 2000                |
|                      |                                               |
|                      | Dr. 3108 Unexpended Appropriations- 2000      |
|                      |                                               |
|                      | "Prior Period Adjustment-Restated"            |
|                      |                                               |
|                      | Cr. 5708 Expended Appropriations- Prior       |
|                      | Period Adjustments-                           |
|                      |                                               |
|                      | Restated 2000                                 |
+----------------------+-----------------------------------------------+
| Expenses were found  | Dr. 4610 Allotments-Realized Resources 100    |
| to be understated    |                                               |
| during FY 2000 by    | Cr. 4981 Up Adj. Of PY Obligations-Unpaid 100 |
| \$100. This amount   |                                               |
| is immaterial and    | Dr. 6100 Operating/Program Expenses 100       |
| does not require     |                                               |
| restatement.         | Cr. 2110 Accounts Payable 100                 |
|                      |                                               |
|                      | Dr. 3107 Unexpended Appropriations-Used 100   |
|                      |                                               |
|                      | Cr. 5700 Expended Appropriations 100          |
+----------------------+-----------------------------------------------+
| Change in accounting | Dr. 4251 Reimbursements and Other Income-Rec. |
| principle[^4]        | 200                                           |
| (Accounting          |                                               |
| principle change     | Cr. 4450 Unapportioned Authority 200          |
| involves revenue     |                                               |
| recognition only)    | Dr. 1310 Accounts Receivable, Fed 200         |
|                      |                                               |
|                      | Cr. 7400 Prior Period Adjustments-Not         |
|                      | Restated 200                                  |
+----------------------+-----------------------------------------------+
| Change in accounting | Dr. 4610 Allotments-Realized Resources 100    |
| principle[^5]        |                                               |
| (Accounting          | Cr. 4981 Up Adj. Of PY Obligations-Unpaid 100 |
| principle change     |                                               |
| involves an          | Dr. 3109 Unexpended Appropriations-"Prior 100 |
| adjustment to        |                                               |
| unexpended           | Period Adjustments-Not Restated"              |
| appropriations only) |                                               |
|                      | Cr. 5709 Expended Appropriations- Prior       |
|                      | Period Adjustments-                           |
|                      |                                               |
|                      | Not Restated 100                              |
|                      |                                               |
|                      | Dr. 7400 Prior Period Adjustments-Not         |
|                      | Restated 100                                  |
|                      |                                               |
|                      | Cr. 2110 Accounts Payable 100                 |
+----------------------+-----------------------------------------------+

## Pre-Closing Trial Balance -- 2001:

+--------------------------------+--------------+----------------------+
| ### USSGL Account              | ### Debit    | ### Credit           |
+--------------------------------+--------------+----------------------+
| 1010 Fund Balance w/ Treasury  | 10,000       |                      |
+--------------------------------+--------------+----------------------+
| 1310 Accounts Receivable,      | 2,200        |                      |
| Federal                        |              |                      |
+--------------------------------+--------------+----------------------+
| 2110 Accounts Payable          |              | 3,200                |
+--------------------------------+--------------+----------------------+
| 3100 Unexpended Appropriations |              | 9,000                |
+--------------------------------+--------------+----------------------+
| 3107 Unexpended                | 100          |                      |
| Appropriations-Used            |              |                      |
+--------------------------------+--------------+----------------------+
| 3108 Unexpended                | 2,000        |                      |
| Appropriations-"Prior          |              |                      |
|                                |              |                      |
| Period Adjustments-Restated"   |              |                      |
+--------------------------------+--------------+----------------------+
| 3109 Unexpended                | 100          |                      |
| Appropriations-"Prior          |              |                      |
|                                |              |                      |
| Period Adjustments-Not         |              |                      |
| Restated"                      |              |                      |
+--------------------------------+--------------+----------------------+
| 5700 Expended Appropriations   |              | 100                  |
+--------------------------------+--------------+----------------------+
| 5709 Expended                  |              | 100                  |
| Appropriation-Prior Period     |              |                      |
| Adjustments-Not Restated       |              |                      |
+--------------------------------+--------------+----------------------+
| 3310 Cumulative Results of     |              | 2,000                |
| Operation                      |              |                      |
+--------------------------------+--------------+----------------------+
| 5708 Expended                  |              | 2,000                |
| Appropriation-Prior Period     |              |                      |
| Adjustments-Restated           |              |                      |
+--------------------------------+--------------+----------------------+
| 6100 Program/Operating         | 100          |                      |
| Expenses                       |              |                      |
+--------------------------------+--------------+----------------------+
| 7400 Prior Period              |              | 100                  |
| Adjustment-Not Restated        |              |                      |
+--------------------------------+--------------+----------------------+
| 7401 Prior Period              | 2,000        |                      |
| Adjustment-Restated            |              |                      |
+--------------------------------+--------------+----------------------+
| 4201 Total Actual Resources -- | 10,000       |                      |
| Collected                      |              |                      |
+--------------------------------+--------------+----------------------+
| 4251 Reimbursements and Other  | 2,200        |                      |
| Income Earned Receivable       |              |                      |
+--------------------------------+--------------+----------------------+
| 4450 Unapportioned Authority   |              | 200                  |
+--------------------------------+--------------+----------------------+
| 4610 Allotment-Realized        |              | 8,800                |
| Resources                      |              |                      |
+--------------------------------+--------------+----------------------+
| 4901 Delivered Orders -        |              | 1,000                |
| Obligations, Unpaid            |              |                      |
+--------------------------------+--------------+----------------------+
| 4981 Upward Adjustment of      |              | 2,200                |
| Prior Year Undelivered         |              |                      |
| Orders - Obligations, Unpaid   |              |                      |
+--------------------------------+--------------+----------------------+
| **Total**                      | 28,700       | 28,700               |
+--------------------------------+--------------+----------------------+

**Closing Entries**

+----------------------+-----------------------------------------------+
| # Close revenu       | Dr. 5708 Expended Appropriation-Restated 2000 |
| es, expenses and oth |                                               |
| er financing sources | 5709 Expended Appropriation-Restated 100      |
|                      |                                               |
|                      | 5700 Expended Appropriation 100               |
|                      |                                               |
|                      | Cr. 6100 Operating/Program Expenses 100       |
|                      |                                               |
|                      | 3310 Cumulative Results of Operations 2100    |
+----------------------+-----------------------------------------------+
| Close prior period   | Dr. 3310 Cumulative Results of Operations     |
| adjustment accounts  | 1900                                          |
| to cumulative        |                                               |
| results of           | Dr. 7400 Prior Period Adjustment-Not Restated |
| operations.          | 100                                           |
|                      |                                               |
|                      | Cr. 7401 Prior Period Adjustment-Restated     |
|                      | 2000                                          |
+----------------------+-----------------------------------------------+
| Close prior period   | Dr. 3100 Unexpended Appropriations 2200       |
| adjustment accounts  |                                               |
| and unexpended       | Cr. 3107 Unexpended Appropriations-Used 100   |
| appropriation used   |                                               |
| accounts to          | 3108 Unexpended Appropriations-"Prior         |
| unexpended           |                                               |
| approp               | Period Adjustments-Restated" 2000             |
| riations-cumulative. |                                               |
|                      | 3109 Unexpended Appropriations-"Prior         |
|                      |                                               |
|                      | Period Adjustments-Not Restated" 100          |
+----------------------+-----------------------------------------------+
| Close budgetary      | Dr. 4981 Up Adj. Of PY Obligations-Unpaid     |
| obligation account   | 2200                                          |
|                      |                                               |
|                      | Cr. 4901 Delivered Orders, Obligations-Unpaid |
|                      | 2200                                          |
+----------------------+-----------------------------------------------+
| Close budgetary      | Dr. 4610 Allotment-Realized Resources 8800    |
| resource account     |                                               |
|                      | Cr. 4450 Unapportioned Authority 8800         |
+----------------------+-----------------------------------------------+

## Post-Closing Trial Balance -- 2001:

+-----------------------------+-----------------+----------------------+
| ### USSGL Account           | ### Debit       | ### Credit           |
+-----------------------------+-----------------+----------------------+
| 1010 Fund Balance w/        | 10,000          |                      |
| Treasury                    |                 |                      |
+-----------------------------+-----------------+----------------------+
| 1310 Accounts Receivable,   | 2,200           |                      |
| Federal                     |                 |                      |
+-----------------------------+-----------------+----------------------+
| 2110 Accounts Payable       |                 | 3,200                |
+-----------------------------+-----------------+----------------------+
| 3100 Unexpended             |                 | 6,800                |
| Appropriations              |                 |                      |
+-----------------------------+-----------------+----------------------+
| 3310 Cumulative Results of  |                 | 2,200                |
| Operation                   |                 |                      |
+-----------------------------+-----------------+----------------------+
| 4201 Total Actual Resources | 10,000          |                      |
| -- Collected                |                 |                      |
+-----------------------------+-----------------+----------------------+
| 4251 Reimbursements and     | 2,200           |                      |
| Other Income Earned         |                 |                      |
| Receivable                  |                 |                      |
+-----------------------------+-----------------+----------------------+
| 4450 Unapportioned          |                 | 9,000                |
| Authority                   |                 |                      |
+-----------------------------+-----------------+----------------------+
| 4901 Delivered Orders,      |                 | 3,200                |
| Obligations, Unpaid         |                 |                      |
+-----------------------------+-----------------+----------------------+
| **Total**                   | 24,400          | 24,400               |
+-----------------------------+-----------------+----------------------+

### FINANCIAL STATEMENTS

### BALANCE SHEET 2001 2000 2000

(Restated)

1A1 Fund Balance with Treasury (1010E) 10,000 10,000 10,000

1A2 Accounts Receivable (1310E, Fed) 2,200 2,000 2,000

2 Total Assets 12,200 12,000 12,000

3A1 Accounts Payable (2110 E, Fed) 3,200 3,000 1,000

4 Total Liabilities 3,200 3.000 1,000

6A Unexpended Appropriations (3100E) 6,800 7,000 9,000

6B Cumulative Results of Operations (3310E) 2,200 2,000 2,000

7 Total Net Position 9,000 9,000 11,000

8 Total Liabilities and Net Position 12,200 12,000 12,000

### Statement of Net Cost

1C Total Cost (6100E) 100 3,000 1,000

Less: Earned Revenue (2,000) (2,000)

4 Net Cost of Operations 100 1,000 (1,000)

### 

### Statement of Changes in Net Position (FY 2001)

**Cum Results Unexp Approp**

(3310) **(3100)**

## 1 Beginning Balances 2,000 9,000

2 Prior Period Adjustments-Restated

(7401E, 3108E, 5708E) (2,000)

Beginning Balances 2,000 7,000

(After restatement)

Prior Period Adjustments-Not Restated

(7400E, 3109E, 5709E) 200 ( 100)

3 Beginning Balances, As adjusted 2,200 6,900

7 Appropriations Used (5700E, 3107E) 100 (100)

16 Total Financing Sources (Calc 6..15) 100 (100)

17 Net Cost of Operations 100

Ending Balances (Calc 3+16-17) 2,200 6,800

**Statement of Changes in Net Position (2000 Restated)**

**Cum Results Unexp Approp**

**(3310) (3100)**

## Beginning Balances 0 0

Prior Period Adjustments

Beginning Balances, As Adjusted 0 0

Appropriations Received (3101E) 10,000

Appropriations Used (3107/5700) 3,000 (3,000)

Total Financing Sources 3,000 (3,000)

Net Cost of Operations 1,000

Ending Balances 2,000 7,000

### Statement of Changes in Net Position (2000)

**Cum Results Unexp Approp**

**(3310) (3100)**

## Beginning Balances 0 0

Prior Period Adjustments

## Beginning Balances, As Adjusted 0 0

## Appropriations Received 10,000

Appropriations Used 1,000 (1,000)

Total Financing Sources 1,000 9,000

Net Cost of Operations (1,000)

Ending Balances 2,000 9,000

### SF 133 Statement of Budget Execution and Budgetary Resources (2001)

## 2A Unobligated Balance, Beg. of Period 11,000 

(4201B, 4251B, 4901E)

## 3A2 Spending Authority from Offsetting Coll

Receivable (4251E-B) 200

7 Total Budgetary Resources 11,200

8A1 Obligations Incurred (4901E-B, 4981) 2,100

9A1 Unobligated Balance, Currently Available 8,900

(4610E)

10D Unobligated Balances Not Avail-Other 200

(4450E)

11 Total Status of Resources 11,200

12 Obligated Balance, Beg. (4251B, 4901B) (1,000)

13 Obligated Balance, Net Transfer 0

14 Obligated Balance, End

14A Accounts Receivable (4251E) 2,200

14D Accounts Payable (4901E) 2,000

15A Gross Disbursement 0

15B Offsetting Collections 0

**Please note: The SF 133 is not restated for FY 2000.**

### Statement of Financing (2001)

1 Obligations Incurred (4901E-B, 4981) 2,200

2 Less: Spending Authority from Offsetting

Collections (4251E-B) 200

3 Obligations Net of Offsetting Collections 2,000

16 Other Resource or Adjustments

(7400E, 7401E) (1,900)

30 Net Cost of Operations 100

### Statement of Financing (2000 Restated)

1 Obligations Incurred (4901E-B, 4891E) 3,000

2 Less: Spending Authority from Offsetting

2 Less: Spending Authority from Offsetting

Collections (4251E-B) 2,000

3 Obligations Net of Offsetting Collections 1,000

16 Other Resource or Adjustments

30 Net Cost of Operations 1,000

[^1]: ^?^ SFFAS No. 7, Revenue and Other Financing Sources, paragraph
    no. 76

[^2]: ^1^

[^3]: ^2^ SFFAS No. 21, Reporting Corrections of Errors and Changes in
    Accounting Principles, paragraph no. 5

[^4]: ^3^ For illustration purposes only.

[^5]: ^4^ For illustration purposes only.