**[Summary:]{.underline}**

Office of Management and Budget (OMB) Circular No. A-136, "Financial
Reporting Requirements" was released in August 2005. The A-136 revised
several lines on the Statement of Changes in Net Position (SCNP). One of
the changes effective for Fiscal Year (FY) 2005 involved the format of
line two on the SCNP. Line two, formally known as "Prior Period
Adjustments" is now called "Adjustments" and is further split into two
lines; line 2a, "Changes in Accounting Principle" and 2b "Corrections of
Errors". The IRC is proposing updating the existing prior-period
adjustment accounts to further accommodate this change. If approved by
the USSGL Board, the revised prior-period adjustment accounts will be
effective for FY 2006.

**Account Title**: Unexpended Appropriations - Prior-Period Adjustments
~~- Restated~~

Due to Corrections of Errors

**Account Number**: 3108

**Normal Balance**: Either

**Definition**: The amount of net increase or decrease to unexpended
appropriations due to errors in prior-period financial statements that
resulted from mathematical mistakes, mistakes in the application of
accounting principles, or oversight or misuse of facts that existed at
the time the financial statements were prepared. ~~resulting from a
prior-period adjustment that requires restatement of prior-period
financial statements in accordance with FASAB SFFAS No. 21, "Reporting
Corrections of Errors and Changes in Accounting Principles." FASAB has
retained the current requirement that prior-period financial statements
not be restated for changes in accounting principles, unless otherwise
specified in the transition instruction section of a new FASAB
standard.~~ FACTS I normal balance assigned to this account is "debit."

***Justification: This change accommodates OMB Circular No. A-136,
"Financial Reporting Requirements," Statement of Changes in Net
Position, line two requirements.***

**[PROPOSED CHANGES TO USSGL ACCOUNTS]{.underline}:**

**Account Title**: Unexpended Appropriations - Prior-Period Adjustments
~~- Not~~

> ~~Restated~~ Due to Changes in Accounting Principles

**Account Number**: 3109

**Normal Balance**: Either

**Definition**: The amount of ~~a~~ net increase or decrease to
unexpended appropriations from a prior-period due to a change from one
generally accepted accounting principle to another one that can be
justified as preferable or the adoption of a new FASAB standard. ~~as a
result of posting a "prior-period adjustment." This USSGL account is
used only when making a "prior-period adjustment" that does not require
restatement of prior-period financial statements in accordance with
FASAB SFFAS No. 21, "Reporting Corrections of Errors and Changes in
Accounting Principles."~~ FACTS I normal balance assigned to this
account is "debit."

***Justification: This change accommodates OMB Circular No. A-136,
"Financial Reporting Requirements," Statement of Changes in Net
Position, line two requirements.***

**Account Title**: Expended Appropriations - Prior-Period Adjustments
~~- Restated~~

Due to Corrections of Errors

**Account Number**: 5708

**Normal Balance**: Either

**Definition**: The amount of net increase or decrease to expended
appropriations due to errors in prior-period financial statements that
resulted from mathematical mistakes, mistakes in the application of
accounting principles, or oversight or misuse of facts that existed at
the time the financial statements were prepared. ~~resulting from a
prior-period adjustment that requires restatement of prior-period
financial statements in accordance with FASAB SFFAS No. 21, "Reporting
Corrections of Errors and Changes in Accounting Principles." FASAB has
retained the current requirement that prior-period financial statements
not be restated for changes in accounting principles, unless otherwise
specified in the transition instruction section of a new FASAB
standard.~~ FACTS I normal balance assigned to this account is "credit."

***Justification: This change accommodates OMB Circular No. A-136,
"Financial Reporting Requirements," Statement of Changes in Net
Position, line two requirements.***

**[PROPOSED CHANGES TO USSGL ACCOUNTS]{.underline}:**

**Account Title**: Expended Appropriations - Prior-Period Adjustments
~~- Not~~

> ~~Restated~~ Due to Changes in Accounting Principles

**Account Number**: 5709

**Normal Balance**: Either

**Definition**: The amount of net increase or decrease to expended
appropriations ~~resulting~~ from a prior-period due to a change from
one generally accepted accounting principle to another one that can be
justified as preferable or the adoption of a new FASAB standard.
~~adjustment. The adjustment does not require restatement of
prior-period financial statements in accordance with FASAB SFFAS No. 21,
"Reporting Corrections of Errors and Changes in Accounting
Principles."~~ FACTS I normal balance assigned to this account is
"credit."

***Justification: This change accommodates OMB Circular No. A-136,
"Financial Reporting Requirements," Statement of Changes in Net
Position, line two requirements.***

**Account Title**: Prior-Period Adjustments ~~- Not Restated~~ Due to
Corrections of

> Errors

**Account Number**: 7400

**Normal Balance**: Either

**Definition**: The amount of ~~material~~ adjustments affecting the
cumulative results of operations due to errors in prior-period financial
statements that resulted from mathematical mistakes, mistakes in the
application of accounting principles, or oversight or misuse of facts
that existed at the time the financial statements were prepared. ~~These
adjustments do not require restatement of prior-period financial
statements in accordance with FASAB SFFAS No. 21, "Reporting Corrections
of Errors and Changes in Accounting Principles."~~ FACTS I normal
balance assigned to this account is "credit."

***Justification: This change accommodates OMB Circular No. A-136,
"Financial Reporting Requirements," Statement of Changes in Net
Position, line two requirements.***

**[PROPOSED CHANGES TO USSGL ACCOUNTS]{.underline}:**

**Account Title**: Prior-Period Adjustments ~~- Restated~~ Due to
Changes in

> Accounting Principles

**Account Number**: 7401

**Normal Balance**: Either

**Definition**: The amount of adjustments affecting the cumulative
results of operations due to change from one generally accepted
accounting principle to another one that can be justified as preferable
or the adoption of a new FASAB standard. FACTS I normal balance assigned
to this account is "credit."

~~for correcting material errors from prior periods involving revenues,
expenses, gains, and losses. These adjustments require restatement of
prior-period financial statements in accordance with FASAB SFFAS No. 21,
"Reporting Corrections of Errors and Changes in Accounting Principles."
FASAB has retained the current requirement that prior-period financial
statements not be restated for changes in accounting principles, unless
otherwise specified in the transition instruction section of a new FASAB
standard.~~

***Justification: This change accommodates OMB Circular No. A-136,
"Financial Reporting Requirements," Statement of Changes in Net
Position, line two requirements.***

**[Conclusion:]{.underline}**

If there are any questions regarding the proposed prior-period
adjustment accounts please email me at <michele.crisman@fms.treas.gov>
or call, 202-874-1439.