####### FEDERAL CREDIT PROGRAM 

**BASIC ACCOUNTING AND REPORTING GUIDE**

**FOR DIRECT LOAN AND LOAN GUARANTEE PROGRAMS WITHOUT COLLATERAL**

**(PRE-CREDIT REFORM)**

####### 

####### July 2004

**PREPARED BY:**

**UNITED STATES STANDARD GENERAL LEDGER DIVISION**

**ACCOUNTING SYSTEMS AND STANDARDS DIRECTORATE**

**GOVERNMENTWIDE ACCOUNTING**

**FINANCIAL MANAGEMENT SERVICE**

**U.S. DEPARTMENT OF THE TREASURY**

**TABLE OF CONTENTS**

[OVERVIEW 3](#overview)

[CONCEPTUAL FRAMEWORK 5](#conceptual-framework)

[ACCOUNT TABLES 6](#account-tables)

[SCENARIO 9](#scenario)

[TRANSACTIONS 11](#transactions)

[FINANCIAL STATEMENTS 25](#financial-statements)

[APPENDIX: REFERENCES 30](#appendix-references)

# OVERVIEW

This guide is designed for those who:

-   Formulate and execute Federal credit program budgets, including
    accounting for assets, liabilities, net position, income, expenses,
    and budgetary resources;

-   Prepare agency financial statements;

-   Audit the agency financial statements;

-   Manage or provide service to participants in direct loan programs;

-   Design and maintain computer systems for financial programs;

    AND

-   Instruct others in basic accounting and reporting for direct loan
    programs.

This guide is illustrative, rather than authoritative, and is
categorized as "other accounting literature" in the hierarchy of
accounting principles for Federal entities.[^1] It supersedes the
original and subsequent pre-Credit Reform scenarios. Users may download
the guide from the Financial Management Service (FMS) Web site at
**www.fms.treas.gov/ussgl/creditreform.**

In order to understand and gain the most from this guide, the user
should have a working knowledge of the following:

-   Budgetary and proprietary accounting, related reporting, and
    terminology;

-   The U. S. Government Standard General Ledger (USSGL) accounts for
    basic annual operating appropriations and revolving funds;

-   The concepts of Federal credit program accounting and reporting,
    fund structures, and terminology;

    AND

-   The Credit Reform Act and other requirements established by the Act.

This guide illustrates accounting and reporting for a Federal credit
program with direct loans and loan guarantees obligated prior to October
1, 1991, funded by no-year authority from an appropriation carried
forward from September 30, 1990, and offsetting collections. Accounting
is based on net realizable value (for direct loans and loan assets) or
net expected value (for loan guarantee liabilities).[^2]

The guide covers common transactions and reports with the focus on
transactions unique to Federal credit program accounting. For example,
the guide does not present undelivered orders with advances, because
they are not unique to credit program accounting. It excludes
transactions involving collateral and borrowing and repaying monies from
Treasury, since they are covered in separate guides. Users may visit the
FMS Web site at **www.fms.treas.gov/ussgl** to view other guides.

Transactions are presented over a 1-year period for a fictitious Federal
agency with a single direct loan and loan guarantee program, which began
operations prior to October 1, 1991.

The transactions covered are:

-   Formulation, apportionment, and allotment of the budget;

-   Payment of administrative expenses;[^3]

-   Disbursement for new direct loans and commitment of new loan
    guarantees;

-   Collection of guarantee fees;

-   Collection of loan principal and interest on direct loans and
    defaulted guaranteed loans;

-   Payment of interest supplements;

-   Payment of default claims;

-   Assuming defaulted guaranteed loans and interest for direct
    collection;

-   Modification of direct loan and loan guarantee terms, with resulting
    transfer of the loans and guarantees to the financing fund;

-   Accrual of interest from borrowers;

-   Writeoff of bad debts without receiving collateral;

-   Accrual of bad debts expense;

-   Transfer of excess funds to Treasury; and

-   Closing entries.

The guide illustrates the following yearend agency reports and notes:

-   Balance Sheet;

-   Statement of Net Cost;

-   Statement of Net Position;

-   Statement of Financing;

-   Statement of Budgetary Resources;

-   FMS 2108: Yearend Closing Statement;

-   Program and Financing Schedule;

-   Credit Program Footnote.

An SF 132: Apportionment and Reapportionment Schedule, is illustrated at
the beginning of the year and is revised once during the year. In
addition, Appendix 1 provides a listing of key references.

Except for the Request for Apportionment, which is not subject to
Federal generally accepted accounting principles (FEDGAAP), these
reports are in compliance with FEDGAAP, as promulgated by the Federal
Accounting Standards Advisory Board (FASAB) and the U.S. Office of
Management and Budget (OMB). Like the journal entries for the underlying
transactions, the reports are illustrative. Agencies may have other ways
of formatting their reports that meet the authoritative requirements.
The SF 132, which is not required to be audited and published with the
audited financial statements, is in compliance with OMB regulations.
Agencies must prepare and format the SF 132 as illustrated in this
guide, unless an agency has direction from or agreement with OMB to do
otherwise.

Direct questions regarding this guide to the USSGL Division at
**www.fms.treas.gov/ussgl**, using the USSGL Issue Form, or to:

> Director, USSGL Division
>
> Accounting Systems and Standards Directorate
>
> Governmentwide Accounting
>
> Financial Management Service
>
> 3700 East-West Highway\
> Hyattsville, MD 20872

The USSGL Web site also includes a list of USSGL representatives and
their telephone numbers.

# CONCEPTUAL FRAMEWORK

The guide uses USSGL account numbers and, generally, titles. When
necessary, the guide expands USSGL account titles, using brackets, to
capture specific information required for reporting. For example,
brackets are used to capture information to separate administrative
expense from interest supplement expense, both of which would be merged
into account 6100 if no other designation were made. For administrative
expense, "\[Administrative Expense\]" is included after the title for
USSGL account 6100, "Operating Expenses/Program Costs." In the same
manner, for interest supplement expense, "\[Interest Supplement
Expense\]" is included after the title for USSGL account 6100. The USSGL
Supplement, Section II, contains definitions for USSGL accounts.

Entries are made in general journal form, using USSGL accounts, and are
summarized in trial balances for each year. When necessary, the USSGL
accounts are subdivided or otherwise supplemented with more detail to
provide the illustrated reporting. The entries made and the method
chosen to illustrate the detail provide only one way of accounting.
Agencies may have other ways of structuring their ledgers and making
journal entries that accomplish the same result.

# ACCOUNT TABLES

The following account tables identify the accounts used in the guide to
record transactions and prepare reports, and the structure under which
they fall. Because the transactions are not comprehensive, the tables do
not contain all accounts that agencies may use in their actual agency
program. The USSGL Supplement, Section I, contains the complete chart of
USSGL accounts.

+-----------------------------------------------------------------------+
| **BUDGETARY ACCOUNTS USED**                                           |
|                                                                       |
| **RESOURCES**                                                         |
|                                                                       |
| > [Anticipated]{.underline}                                           |
| >                                                                     |
| > 4047 Anticipated Transfers to the General Fund of the Treasury      |
| >                                                                     |
| > 4060 Anticipated Collections From Non-Federal Sources               |
| >                                                                     |
| > 4070 Anticipated Collections From Federal Sources                   |
| >                                                                     |
| > [Realized]{.underline}                                              |
| >                                                                     |
| > 4119 Other Appropriations Realized                                  |
| >                                                                     |
| > 4201 Total Actual Resources - Collected                             |
| >                                                                     |
| > 4261 Actual Collections of Business-Type Fees                       |
| >                                                                     |
| > 4262 Actual Collections of Loan Principal                           |
| >                                                                     |
| > 4263 Actual Collections of Loan Interest                            |
| >                                                                     |
| > 4276 Actual Collections From Financing Fund                         |
| >                                                                     |
| > 4151 Actual Capital Transfers to the General Fund of the Treasury,  |
| >                                                                     |
| > Current-Year Authority                                              |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| **BUDGETARY ACCOUNTS USED**                                           |
|                                                                       |
| **(CONCLUDED)**                                                       |
|                                                                       |
| **STATUS OF RESOURCES**                                               |
|                                                                       |
| > [Unobligated]{.underline}                                           |
| >                                                                     |
| > 4450 Unapportioned Authority                                        |
| >                                                                     |
| > 4510 Apportionments                                                 |
| >                                                                     |
| > 4590 Apportionments - Anticipated Resources -- Programs Subject to  |
| > Apportionment                                                       |
| >                                                                     |
| > 4610 Allotments - Realized Resources                                |
| >                                                                     |
| > [Obligated]{.underline}                                             |
| >                                                                     |
| > 4801 Undelivered Orders -- Obligations, Unpaid                      |
| >                                                                     |
| > 4901 Delivered Orders -- Obligations, Unpaid                        |
| >                                                                     |
| > 4902 Delivered Orders -- Obligations, Paid \[Loans Made\]           |
| >                                                                     |
| > 4902 Delivered Orders -- Obligations, Paid \[Other\]                |
| >                                                                     |
| > 4902 Delivered Orders -- Obligations, Paid \[Defaults\]             |
| >                                                                     |
| > 4902 Delivered Orders -- Obligations, Paid \[Transfer of            |
| > Liabilities to Financing Fund\]                                     |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| **PROPRIETARY ACCOUNTS USED**                                         |
|                                                                       |
| **ASSETS**[^4]                                                        |
|                                                                       |
| 1010 Fund Balance With Treasury                                       |
|                                                                       |
| 1340 Interest Receivable \[Direct Loans\]                             |
|                                                                       |
| 1340 Interest Receivable \[Defaulted Guaranteed Loans\]               |
|                                                                       |
| 1349 Allowance for Loss on Interest Receivable \[Direct Loans\]       |
|                                                                       |
| 1349 Allowance for Loss on Interest Receivable \[Defaulted Guaranteed |
| Loans\]                                                               |
|                                                                       |
| 1350 Loans Receivable \[Direct\]                                      |
|                                                                       |
| 1350 Loans Receivable \[Defaulted Guaranteed\]                        |
|                                                                       |
| 1359 Allowance for Loss on Loans Receivable \[Direct\]                |
|                                                                       |
| 1359 Allowance for Loss on Loans Receivable \[Defaulted Guaranteed\]  |
|                                                                       |
| **LIABILITIES**                                                       |
|                                                                       |
| 2110 Accounts Payable                                                 |
|                                                                       |
| 2180 Loan Guarantee Liability                                         |
|                                                                       |
| **NET POSITION**                                                      |
|                                                                       |
| 3100 Unexpended Appropriations - Cumulative                           |
|                                                                       |
| 3107 Unexpended Appropriations - Used                                 |
|                                                                       |
| 3310 Cumulative Results of Operations                                 |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| **PROPRIETARY ACCOUNTS USED**                                         |
|                                                                       |
| **(CONCLUDED)**                                                       |
|                                                                       |
| **FINANCING SOURCES (including gains)**                               |
|                                                                       |
| 5200 Revenue From Services Provided                                   |
|                                                                       |
| 5312 Interest Revenue - Loans Receivable/Uninvested Funds \[From      |
| Borrowers\]                                                           |
|                                                                       |
| 5700 Expended Appropriations                                          |
|                                                                       |
| 5765 Nonexpenditure Financing Sources - Transfers Out                 |
|                                                                       |
| 7190 Other Gains                                                      |
|                                                                       |
| **EXPENSES (including losses)**                                       |
|                                                                       |
| 6100 Operating Expenses/Program Costs \[Administrative Expense\]      |
|                                                                       |
| 6100 Operating Expenses/Program Costs \[Interest Supplement Expense\] |
|                                                                       |
| 6720 Bad Debt Expense                                                 |
|                                                                       |
| 7210 Losses on Disposition of Assets - Other                          |
+-----------------------------------------------------------------------+

# 

# SCENARIO

This section presents transactions, including closing entries, along
with interim and yearend trial balances for the fiscal year. Users
should note the various caveats provided in prior sections of this guide
when reviewing the information.

OMB authorized the agency, which operates under no-year authority, to
make direct loans and to guarantee 100 percent of loans and interest for
program participants prior to fiscal 1992. Loans and guarantees that
were obligated before that date are accounted for in the agency's
liquidating fund, illustrated in this scenario. The agency will pay its
costs from the unobligated balance of an existing no-year appropriation
and new collections and will return monies in excess of the amount per
an agreement with OMB. An authorized agency official will provide
blanket allotment authority for all realized resources, as they are
realized, up to the amount apportioned by OMB. The agency accounts for
loans receivable on its books using net realizable value. It accounts
for the loan guarantee liability using the net estimated amount payable.
The agency does not use present value accounting. Present value
accounting is illustrated in the direct loans, loan guarantee, and
foreclosed property guides.

Budgetary and proprietary trial balances at the beginning of the year
are shown below. Note that loans and interest receivable are divided
into those relating to direct loans and those relating to loan
guarantees, to facilitate the separate reporting required.[^5]

## Beginning-of-Year Trial Balances

***Budgetary Debit** **Credit***

4201 Total Actual Resources - Collected \$4,000

4450 Unapportioned Authority \$3,600

4801 Undelivered Orders -- Obligations, Unpaid 300

4901 Delivered Orders -- Obligations, Unpaid [100]{.underline}

> \$4,000 \$4,000

***Proprietary** **Debit** **Credit***

1010 Fund Balance With Treasury \$ 4,000

1340 Interest Receivable \[Direct Loans\] 400

1340 Interest Receivable \[Defaulted Guaranteed Loans\] 300

1349 Allowance for Loss on Interest Receivable \[Direct Loans\] \$ 100

1349 Allowance for Loss on Interest Receivable \[Def. Guar. Loans\] 200

1350 Loans Receivable \[Direct\] 3,250

1350 Loans Receivable \[Defaulted Guaranteed\] 1,750

1359 Allowance for Loss on Loans Receivable \[Direct\] 2,500

1359 Allowance for Loss on Loans Receivable \[Defaulted Guaranteed\]
1,000

2110 Accounts Payable 100

2180 Loan Guarantee Liability 9,000

3100 Unexpended Appropriations - Cumulative 3,000

3310 Cumulative Results of Operations[^6] [6,200]{.underline}
[0]{.underline}

> \$15,900 \$15,900

During the year, the agency expected to receive collections as follows:

> Principal on loans receivable \$850
>
> Interest on loans receivable 150
>
> Ongoing guarantee fees from borrowers [50]{.underline}
>
> \$1,050

The agency expected to make the following disbursements:

> Beginning undelivered orders \$ 300
>
> Beginning accounts payable 100
>
> Administrative expenses 275
>
> Interest supplements 25
>
> Default claims [1,200]{.underline}
>
> \$1,900

Per agreement with OMB, the agency will return to Treasury all cash in
excess of \$3,030.[^7] The \$120 expected to be returned at yearend, is
computed as follows:

> Beginning balance of cash \$4,000

Anticipated cash receipts 1,050

Anticipated cash disbursements [(1,900)]{.underline}

Expected cash balance at yearend \$3,150

Cash reserve allowed [(3,030)]{.underline}

Anticipated cash to be returned to Treasury \$ 120 [^8]

# TRANSACTIONS

**1. The agency prepared the budget formulation.** (TC A140, A142)

4060 Anticipated Collections From Non-Federal Sources 1,050

4047 Anticipated Transfers to the General Fund of the Treasury 120

4450 Unapportioned Authority 930

An SF-132: Apportionment and Reapportionment Schedule, for this
transaction appears below.

## 

## Direct Loan and Loan Guarantee Agency

## SF-132 Apportionment and Reapportionment Schedule

**Budgetary Resources**

**Unobligated balance:**

2A. Brought forward, October 1 \$3,600

3C. Anticipated for rest of year, without advance 1,050

6F. Anticipated rest of year (120)

7\. Total budgetary resources \$4,530

## Application of Budgetary Resources

8\. Apportioned \$1,530

11\. Unapportioned balance of revolving fund 3,000

12\. Total status of budgetary resources \$4,530

**2. OMB approved the agency request for apportionment without change,
and the agency recorded the apportionment.** (TC A116, A118)

4450 Unapportioned Authority 1,530

4510 Apportionments \[of Realized Resources\] 600[^9]

4590 Apportionments - Anticipated Resources -\
Programs Subject to Apportionment 930

**3. A properly designated agency official apportioned the full amount
of realized resources and issued a blanket authorization to allot
anticipated resources as they were realized, not to exceed the amount of
the apportionment.** (TC A120)

4510 Apportionments 600

4610 Allotments - Realized Resources 600

The agency received the following collections during the year:

> Principal on direct loans receivable \$550
>
> Principal on defaulted guaranteed loans receivable 250
>
> Interest on direct loans receivable 90
>
> Interest on defaulted guaranteed loans receivable 70
>
> Ongoing guarantee fees from borrowers 55

**4. To record the collections.** (TC C109**)**

4261 Actual Collections of Business-Type Fees 55

4262 Actual Collections of Loan Principal 800

4263 Actual Collections of Loan Interest 160

4060 Anticipated Collections From Non-Federal Sources 1,015

1010 Fund Balance With Treasury 1,015

1340 Interest Receivable \[Direct Loans\] 90

1340 Interest Receivable \[Defaulted Guaranteed Loans\] 70

1350 Loans Receivable \[Direct\] 550

1350 Loans Receivable \[Defaulted Guaranteed\] 250

5200 Revenue From Services Provided 55

**5. To allot the authority from the collections.** (TC A122)

4590 Apportionments - Anticipated Resources -\
Programs Subject to Apportionment 930

4610 Allotments - Realized Resources 930[^10]

The agency made the following cash disbursements during the year:

> Administrative expenses \$ 485
>
> Interest supplements 25
>
> Direct loans 10
>
> Accounts payable at beginning of year 100
>
> Defaults 1,250

The amount paid for administrative expenses included the \$300 of
undelivered orders at the beginning of the year (bills for which totaled
\$300) plus an additional \$185.

**6. To record disbursements. (TC B104, B110, B134, C206)**

4610 Allotments - Realized Resources 1,470

4801 Undelivered Orders -- Obligations, Unpaid 300

4901 Delivered Orders -- Obligations, Unpaid 100

4902 Delivered Orders -- Obligations, Paid \[Loans Made\] 10

4902 Delivered Orders -- Obligations, Paid \[Other\] 610

4902 Delivered Orders -- Obligations, Paid \[Defaults\] 1,250

1350 Loans Receivable \[Direct\] 10

2110 Accounts Payable 100

2180 Loan Guarantee Liability 1,250

6100 Operating Expenses/Program Costs \[Administrative Expense\] 485

6100 Operating Expenses/Program Costs \[Interest Supplement Expense\] 25

1010 Fund Balance With Treasury 1,870

3107 Unexpended Appropriations - Used 1,870

5700 Expended Appropriations 1,870

The agency acquired receivables on payment of the default claims in the
preceding transaction. The agency's practice is to separately record the
interest and principal as shown below.[^11]^,^[^12]

> Loan principal - gross \$800
>
> Loan principal - realizable value 230
>
> Loan interest - gross 450
>
> Loan interest - realizable value 375

**7. To record loans and interest receivable from non-Federal sources
for defaulted guaranteed loans.** (TC C220, D852)

1340 Interest Receivable \[Defaulted Guaranteed Loans\] 450

1350 Loans Receivable \[Defaulted Guaranteed\] 800

1349 Allowance for Loss on Interest Receivable \[Defaulted Guar. Loans\]
75

1359 Allowance for Loss on Loans Receivable \[Defaulted Guaranteed\] 570

2180 Loan Guarantee Liabilities 605

The agency guaranteed the full amount of principal and interest on a
\$20 loan disbursed this year by the third-party lender involved. The
guarantee had been committed prior to fiscal 1992. In accordance with
the terms of the guarantee, the agency charged no guarantee fees. No
entries are required.[^13]

**Trial Balance (transactions 1 through 7)**

***Budgetary** **Debit** **Credit***

4047 Anticipated Transfers to the General Fund of the Treasury \$ 120

4060 Anticipated Collections From Non-Federal Sources \$ 35

4201 Total Actual Resources - Collected 4,000

4261 Actual Collections of Business-Type Fees 55

4262 Actual Collections of Loan Principal 800

4263 Actual Collections of Loan Interest 160

4450 Unapportioned Authority 3,000

4510 Apportionments \[of Realized Resources\] -0-

4590 Apportionments - Anticipated Resources -\
Programs Subject to Apportionment -0-

4610 Allotments - Realized Resources 60

4801 Undelivered Orders -- Obligations, Unpaid -0-

4901 Delivered Orders -- Obligations, Unpaid -0-

4902 Delivered Orders -- Obligations, Paid \[Loans Made\] 10

4902 Delivered Orders -- Obligations, Paid \[Other\] 610

4902 Delivered Orders -- Obligations, Paid \[Defaults\]
[1,250]{.underline}

> \$5,050 \$5,050

***Proprietary Debit** **Credit***

1010 Fund Balance With Treasury \$ 3,145

1340 Interest Receivable \[Direct Loans\] 310

1340 Interest Receivable \[Defaulted Guaranteed Loans\] 680

1349 Allowance for Loss on Interest Receivable \[Direct Loans\] \$ 100

1349 Allowance for Loss on Interest Receivable \[Def. Guar. Loans\] 275

1350 Loans Receivable \[Direct\] 2,710

1350 Loans Receivable \[Defaulted Guaranteed\] 2,300

1359 Allowance for Loss on Loans Receivable \[Direct\] 2,500

1359 Allowance for Loss on Loans Receivable \[Defaulted Guaranteed\]
1,570

2110 Accounts Payable -0-

2180 Loan Guarantee Liability 8,355

3100 Unexpended Appropriations - Cumulative 3,000

3107 Unexpended Appropriations - Used 1,870

3310 Cumulative Results of Operations 6,200

5200 Revenue From Services Provided 55

5700 Expended Appropriations 1,870

6100 Operating Expenses/Program Costs \[Administrative Expense\] 485

6100 Operating Expenses/Program Costs \[Interest Supplement Expense\]
[25]{.underline} [0]{.underline}

> \$17,725 \$17,725

## Information for Modifications

The agency obtained approval from OMB to modify the terms of direct
loans and loan guarantees. The information was as follows:

> The agency modified the terms of \$100 of direct loans. The net
> realizable value was \$85, and the net present value was \$75. The
> agency was to sell the loans to the financing fund. All interest on
> the loans had been paid to date.
>
> The agency modified the terms for \$275 of guaranteed loans. The
> expected value of the liability from guaranteeing the loans was \$90,
> and the present value was \$83. The agency transferred the guarantees
> to the financing fund.[^14]

The agency prepared a new SF-132, which is illustrated below.

## Direct Loan and Loan Guarantee Agency

## SF-132: Apportionment and Reapportionment Schedule

**Budgetary Resources**

**Unobligated balance:**

2A. Brought forward, October 1 \$ 600

3A. Earned 1,015

3C. Anticipated for rest of year, without advance 110

5\. Temporarily not available pursuant to public law (112)

7\. Total budgetary resources \$1,613

## Application of Budgetary Resources

8\. Apportioned \$1,583

11\. Unapportioned balance of revolving fund 30

12\. Total status of budgetary resources \$1,613

The agency compiled information for a new SF-132 as shown in the table
below, with crosswalks shown in square brackets.

+-----------------------------------------------------------------------+
| Line 2A Remains at \$600                                              |
|                                                                       |
| Line 3A \$1,015 \[4261, 4262, 4263\]                                  |
|                                                                       |
| Line 3C \$110 \[account 4060, \$35, + \$75 to be received from the    |
| financing fund\]                                                      |
|                                                                       |
| Line 5 \$112\* \[see note below\]                                     |
|                                                                       |
| Line 7 \$1,613 \[lines 2A + 3A + 3C - 5\]                             |
|                                                                       |
| Line 8 \$1,583 \[\$1,500 originally anticipated + \$83 to be paid to  |
| the financing                                                         |
|                                                                       |
| fund\]                                                                |
|                                                                       |
| Line 11 Remains at \$30                                               |
|                                                                       |
| Line 12 \$1,613 \[lines 8 + 11\]                                      |
|                                                                       |
| \*Computation of cash to be paid to Treasury:                         |
|                                                                       |
| Balance of cash after the previous transactions \$145 \[1010\]        |
|                                                                       |
| Anticipated additional receipts 110 \[Line 3C\]                       |
|                                                                       |
| Anticipated additional payments [(113)]{.underline} \[Line 8 -       |
| 4801, 4901, 4902 \]                                                   |
|                                                                       |
| Anticipated ending balance of cash available \$142                    |
|                                                                       |
| Amount needed to carry into the next year [(30)]{.underline} \[Line   |
| 11\]                                                                  |
|                                                                       |
| Cash to be returned to Treasury \$112                                 |
+-----------------------------------------------------------------------+

OMB approved the new SF-132 as requested.

**8. The agency recorded the submission of the new SF-132.** (TC A140,
A142R)

4070 Anticipated Collections From Federal Sources 75

4047 Anticipated Transfers to the General Fund of the Treasury 8

4450 Unapportioned Authority 83

**9. The agency recorded OMB approval of the SF-132.** (TC A118)

4450 Unapportioned Authority 83

4590 Apportionments - Anticipated Resources -\
Programs Subject to Apportionment 83

**10. The agency transferred the direct loans to the financing fund,
which paid the present value.** (TC C109, D208, A122)

4276 Actual Collections From Financing Fund 75

4070 Anticipated Collections From Federal Sources 75

1010 Fund Balance With Treasury 75

1359 Allowance for Loss on Loans Receivable \[Direct\] 15

7210 Losses on Disposition of Assets -- Other \[on Modification\
and Sale of Loans Receivable\] 10

1350 Loans Receivable \[Direct\] 100

4590 Apportionments - Anticipated Resources -\
Programs Subject to Apportionment 75

4610 Allotments - Realized Resources 75

**11. The agency transferred the loan guarantees to the financing fund,
along with payment of the present value.** (TC B104, B134)

4610 Allotments - Realized Resources 83

4902 Delivered Orders -- Obligations, Paid \[Transfer of

> Liabilities to Financing Fund\] 83

2180 Loan Guarantee Liability 90

1010 Fund Balance With Treasury 83

7190 Other Gains \[on Disp. of Loan Guar. Liab.\
Modified and Transferred\] 7

3107 Unexpended Appropriations -- Used 83[^15]

5700 Expended Appropriations 83

**Trial Balance (transactions 1 through 11)**

***Budgetar**y **Debit Credit***

4047 Anticipated Transfers to the General Fund of the Treasury \$ 112

4060 Anticipated Collections From Non-Federal Sources \$ 35

4070 Anticipated Collections From Federal Sources -0-

4201 Total Actual Resources - Collected 4,000

4261 Actual Collections of Business-Type Fees 55

4262 Actual Collections of Loan Principal 800

4263 Actual Collections of Loan Interest 160

4276 Actual Collections From Financing Fund 75

4450 Unapportioned Authority 3,000

4510 Apportionments \[of Realized Resources\] -0-

4590 Apportionments - Anticipated Resources -\
Programs Subject to Apportionment 8

4610 Allotments - Realized Resources 52

4801 Undelivered Orders -- Obligations, Unpaid -0-

4901 Delivered Orders -- Obligations, Unpaid -0-

4902 Delivered Orders -- Obligations, Paid \[Loans Made\] 10

4902 Delivered Orders -- Obligations, Paid \[Other\] 610

4902 Delivered Orders -- Obligations, Paid \[Defaults\] 1,250

4902 Delivered Orders -- Obligations, Paid \[Transfer to Fin. Fund
[83]{.underline}

> \$5,125 \$5,125

#### Proprietary Debit Credit

1010 Fund Balance With Treasury \$3,137

1340 Interest Receivable \[Direct Loans\] 310

1340 Interest Receivable \[Defaulted Guaranteed Loans\] 680

1349 Allowance for Loss on Interest Receivable \[Direct Loans\] \$ 100

1349 Allowance for Loss on Interest Receivable \[Def. Guar. Loans\] 275

1350 Loans Receivable \[Direct\] 2,610

1350 Loans Receivable \[Defaulted Guaranteed\] 2,300

1359 Allowance for Loss on Loans Receivable \[Direct\] 2,485

1359 Allowance for Loss on Loans Receivable \[Defaulted Guaranteed\]
1,570

2110 Accounts Payable -0-

2180 Loan Guarantee Liability 8,265

3100 Unexpended Appropriations -- Cumulative 3,000

3107 Unexpended Appropriations - Used 1,953

3310 Cumulative Results of Operations 6,200

5200 Revenue From Services Provided 55

5700 Expended Appropriations 1,953

##### Trial Balance Cont.

6100 Operating Expenses/Program Costs \[Administrative Expense\] 485

6100 Operating Expenses/Program Costs \[Interest Supplement Expense\] 25

7190 Other Gains \[Disp. of Loan Guar. Liab.\
Modified and Transferred\] 7

7210 Losses on Disposition of Assets - Other\
\[Modification and Sale of Loans Receivable\] [10]{.underline}

> \$17,710 \$17,710

**12. The agency accrued \$35 of interest on direct loans and \$30 on
defaulted guaranteed loans receivable at yearend.** (TC C216)

1340 Interest Receivable \[Direct Loans\] 35

1340 Interest Receivable \[Defaulted Guaranteed Loans\] 30

5312 Interest Revenue - Loans Receivable/Uninvested Funds \[Borrowers\]
65

**13. The agency wrote off bad debts as follows: interest receivable on
direct loans, \$10; interest receivable on defaulted guaranteed loans,
\$40; direct loans receivable, \$200; defaulted guaranteed loans
receivable, \$50.** (TC D208, D212)

1349 Allowance for Loss on Interest Receivable \[Direct Loans\] 10

1349 Allowance for Loss on Interest Receivable \[Def. Guar. Loans\] 40

1359 Allowance for Loss on Loans Receivable \[Direct\] 200

1359 Allowance for Loss on Loan Receivable \[Defaulted Guaranteed\] 50

1340 Interest Receivable \[Direct Loans\] 10

1340 Interest Receivable \[Defaulted Guaranteed Loans\] 40

1350 Loans Receivable \[Direct\] 200

1350 Loans Receivable \[Defaulted Guaranteed\] 50

**14. The agency accrued bad debts expense as follows: interest
receivable on direct loans, \$20; interest receivable on defaulted
guaranteed loans, 70; direct loans receivable, \$80; defaulted
guaranteed loans receivable, \$45; loan guarantee liability, \$200.**
(TC D204)

6720 Bad Debt Expense 415

1349 Allowance for Loss on Interest Receivable \[Direct Loans\] 20

1349 Allowance for Loss on Interest Receivable \[Def. Guar. Loans\] 70

1359 Allowance for Loss on Loans Receivable \[Direct\] 80

1359 Allowance for Loss on Loans Receivable \[Defaulted Guaranteed\] 45

2180 Loan Guarantee Liability 200

**15. The agency transferred cash in excess of \$3,030 to Treasury.**
(TC B136 modified)

4047 Anticipated Transfers to the General Fund of the Treasury 107[^16]

4151 Actual Capital Transfers to the General Fund of the Treasury,

Current-Year Authority 107

5765 Nonexpenditure Financing Sources - Transfers Out[^17] 107

1010 Fund Balance With Treasury 107

16\. The agency recorded closing of anticipated accounts. (TC F112,
F114)

### 

### 4450 Unapportioned Authority 22

4047 Anticipated Transfers to the General Fund of the Treasury 5

4590 Apportionments -- Anticipated Resources -\
Programs Subject to Apportionment 8

4060 Anticipated Collections from Non-Federal Sources 35

**Pre-Closing Trial Balances (transactions 1through13)**

#### 

#### Budgetary Debit Credit

4201 Total Actual Resources -- Collected \[Net\] 4,000

4261 Actual Collections of Business-Type Fees 55

4262 Actual Collections of Loan Principal 800

4263 Actual Collections of Loan Interest 160

4276 Actual Collections From Financing Fund 75

4151 Actual Capital Transfers to the General Fund of the Treasury,

Current-Year Authority 107

4450 Unapportioned Authority 2,978

4610 Allotments - Realized Resources 52

4902 Delivered Orders -- Obligations, Paid \[Loans Made\] 10

4902 Delivered Orders -- Obligations, Paid \[Other\] 610

4902 Delivered Orders -- Obligations, Paid \[Defaults\] 1,250

4902 Delivered Orders -- Obligations, Paid \[Transfer to Fin. Fund\]
[83]{.underline}

> \$5,090 \$5,090

#### Proprietary Debit Credit

1010 Fund Balance With Treasury \$ 3,030

1340 Interest Receivable \[Direct Loans\] 335

1340 Interest Receivable \[Defaulted Guaranteed Loans\] 670

1349 Allowance for Loss on Interest Receivable \[Direct Loans\] \$ 110

1349 Allowance for Loss on Interest Receivable \[Def. Guar. Loans\] 305

1350 Loans Receivable \[Direct\] 2,410

1350 Loans Receivable \[Defaulted Guaranteed\] 2,250

1359 Allowance for Loss on Loans Receivable \[Direct\] 2,365

1359 Allowance for Loss on Loans Receivable \[Defaulted Guaranteed\]
1,565

2180 Loan Guarantee Liability 8,465

3100 Unexpended Appropriations - Cumulative 3,000

3107 Unexpended Appropriations - Used 1,953

3310 Cumulative Results of Operations 6,200

5200 Revenue From Services Provided 55

5312 Interest Revenue - Loans Receivable/Uninvested Funds \[Borrowers\]
65

5700 Expended Appropriations 1,953

5765 Nonexpenditure Financing Sources - Transfers-Out 107

6100 Operating Expenses/Program Costs \[Administrative Expense\] 485

6100 Operating Expenses/Program Costs \[Interest Supplement Expense\] 25

6720 Bad Debt Expense 415

7190 Other Gains \[Disp. of Loan Guar. Liab. Modified and Transferred\]
7

7210 Losses on Disposition of Assets -- Other\
\[Modification/Sale of Loans Receivable\] [10]{.underline}

> \$17,890 \$17,890

**17. The agency made budgetary closing entries.** (TC F204, F214, F210)

4902 Delivered Orders -- Obligations, Paid \[Loans Made\] 10

4902 Delivered Orders -- Obligations, Paid \[Other\] 610

4902 Delivered Orders -- Obligations, Paid \[Defaults\] 1,250

4902 Delivered Orders -- Obligations, Paid \[Transfer to Fin. Fund\] 83

4151 Actual Capital Transfers to the General Fund of the Treasury,

Current-Year Authority 107

4201 Total Actual Resources - Collected \[Net\] 970

4261 Actual Collections of Business-Type Fees 55

4262 Actual Collections of Loan Principal 800

4263 Actual Collections of Loan Interest 160

4276 Actual Collections From Financing Fund 75

4610 Allotments - Realized Resources 52

4450 Unapportioned Authority 52

**18. The agency made proprietary closing entries.** (TC F228, F230,
F231, F233)

5200 Revenue From Services Provided 55

5312 Interest Revenue - Loans Receivable/\
Uninvested Funds \[from Borrowers\] 65

5700 Expended Appropriations 1,953

7190 Other Gains \[Disp. of Loan Guar. Liab. Modified/Transferred\] 7

3310 Cumulative Results of Operations 1,038

5765 Nonexpenditure Financing Sources - Transfers Out 107

6100 Operating Expenses/Program Costs \[Administrative Expense\] 485

6100 Operating Expenses/Program Costs \[Interest Supplement Expense\] 25

6720 Bad Debt Expense 415

7210 Losses on Disposition of Assets -- Other\
\[Modification/Sale of Loans Receivable\] 10

3100 Unexpended Appropriations - Cumulative 1,953

3107 Unexpended Appropriations - Used 1,953

**Post-Closing Trial Balances (transactions 1 through17)**

#### Budgetary Debit Credit

4201 Total Actual Resources - Collected \[Net\] 3,030

4450 Unapportioned Authority [3,030]{.underline}

> \$3,030 \$3,030

#### Proprietary Debit Credit

1010 Fund Balance With Treasury \$ 3,030

1340 Interest Receivable \[Direct Loans\] 335

1340 Interest Receivable \[Def. Guar. Loans\] 670

1349 Allowance for Loss on Interest Receivable \[Direct Loans\] \$ 110

1349 Allowance for Loss on Interest Receivable \[Def. Guar. Loans\] 305

1350 Loans Receivable \[Direct\] 2,410

1350 Loans Receivable \[Defaulted Guaranteed\] 2,250

1359 Allowance for Loss on Loans Receivable \[Direct\] 2,365

1359 Allowance for Loss on Loans Receivable \[Defaulted Guaranteed\]
1,565

2180 Loan Guarantee Liability 8,465

3100 Unexpended Appropriations - Cumulative 1,047

3310 Cumulative Results of Operations [5,162]{.underline}

> \$13,857 \$13,857

# FINANCIAL STATEMENTS

+-----------------------------------------------------------------------+
| **Direct Loan and Loan Guarantee Agency**                             |
|                                                                       |
| **Balance Sheet**                                                     |
|                                                                       |
| **As of September 30, 20XX**                                          |
|                                                                       |
| **ENTITY ASSETS**                                                     |
|                                                                       |
| ### Intragovernmental Assets                                          |
|                                                                       |
| 1\. Fund Balance With Treasury (1010) \$3,030                         |
|                                                                       |
| 4\. Loans Receivable (1340E) (1349E) (1350E) (1359E)                  |
| [1,320]{.underline}                                                   |
|                                                                       |
| 15\. Total Assets \$4,350                                             |
|                                                                       |
| **Liabilities with the Public**                                       |
|                                                                       |
| 21\. Loan Guarantee Liability (2180E) 8,465                           |
|                                                                       |
| **Net Position**                                                      |
|                                                                       |
| 29\. Unexpended Appropriations (3100E) \$1,047                        |
|                                                                       |
| 30\. Cumulative Results of Operations (Deficit) (3310E)               |
| [(5,162)]{.underline}                                                 |
|                                                                       |
| 31\. Total Net Position [(4,115)]{.underline}                         |
|                                                                       |
| 32\. Total Liabilities and Net Position \$4,350                       |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| **Direct Loan and Loan Guarantee Agency**                             |
|                                                                       |
| **Statement of Net Cost**                                             |
|                                                                       |
| **for Fiscal Year Ended September 30, 20XX**                          |
|                                                                       |
| **Program Costs**                                                     |
|                                                                       |
| 4\. Gross Cost With the Public (6100E) (6720E) (7210E) \$935          |
|                                                                       |
| 5\. Less: Earned Revenue From the Public (5200E) (5312E) 120          |
|                                                                       |
| 6\. Net Costs With the Public \$815                                   |
|                                                                       |
| 8\. Costs Not Assigned to Programs (7190E) (7)                        |
|                                                                       |
| 10\. Net Cost of Operations \$808                                     |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| **Direct Loan and Loan Guarantee Agency**                             |
|                                                                       |
| **Statement of Changes in Net Position**                              |
|                                                                       |
| **for Fiscal Year Ended September 30, 20XX**                          |
|                                                                       |
| Cumulative Results Unexpended                                         |
|                                                                       |
| of Operations Appropriations                                          |
|                                                                       |
| 1\. Beginning Balances (3310E) (3100E) \$(6,200) \$3,000              |
|                                                                       |
| 7\. Appropriations Used (5700E) (3107E) 1,953 (1,953)                 |
|                                                                       |
| 10\. Transfers In/Out Without Reimb. (5765E) (107)                    |
|                                                                       |
| 17\. Net Cost of Operations (808)                                     |
|                                                                       |
| 18\. Ending Balances \$(5,162) \$1,047                                |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| **Direct Loan and Loan Guarantee Agency**                             |
|                                                                       |
| **Statement of Financing**                                            |
|                                                                       |
| **for Fiscal Year Ended September 30, FY-L**                          |
|                                                                       |
| 1\. Obligations Incurred (4081E-B)(4901 E-B)(4902) \$1,553            |
|                                                                       |
| 2\. Less: Spending Authority From Offset Collections/Recoveries       |
| (4261)(4263)(4276) [1,090]{.underline}                                |
|                                                                       |
| 3\. Obligations Net of Offsetting Collections/Recoveries              |
| [463]{.underline}                                                     |
|                                                                       |
| 5\. Net Obligations [463]{.underline}                                 |
|                                                                       |
| 11\. Total Resources Used To Finance Activities \$463                 |
|                                                                       |
| Resources Used To Finance Items Not Part of the Net Cost of           |
| Operations                                                            |
|                                                                       |
| 12\. Change in Budgetary Resources Obligated for but Not Provided     |
| (4801) (301)                                                          |
|                                                                       |
| 14\. Collections That Increase Liabilities for Loan Guarantees or\    |
| Allowance Subsidies (4262,4263,4276) (1,035)                          |
|                                                                       |
| 15\. Resources That Finance Acquisition of Assets or Liquidation\     |
| of Liabilities (4902) [1,343]{.underline}                             |
|                                                                       |
| 17\. Total Resources Used To Finance Items Not Part of the Net Cost 8 |
|                                                                       |
| 18\. Total Resources Used To Finance the Net Cost of Operations \$455 |
|                                                                       |
| Components Not Requiring or Generating Resources in Current Period    |
|                                                                       |
| 22\. Increase in Exchange Revenue From the Public (1340)              |
| [(65)]{.underline}                                                    |
|                                                                       |
| 24\. Total Components of Net Cost That Will Require/Generate          |
| Resources (65)                                                        |
|                                                                       |
| 26\. Revaluation of Assets or Liabilities (7210, 7190) 3              |
|                                                                       |
| 27\. Other (6720) 415                                                 |
|                                                                       |
| 28\. Total Components of Net Cost That Will Not Require/Generate      |
| Resources 418                                                         |
|                                                                       |
| 29\. Total Components of Net Cost That Will Not Require/Generate      |
| Resources\                                                            |
| in the Current Period [353]{.underline}                               |
|                                                                       |
| 30\. Net Cost of Operations \$808                                     |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| **Direct Loan and Loan Guarantee Agency**                             |
|                                                                       |
| **Statement of Budgetary Resources**                                  |
|                                                                       |
| **for Fiscal Year Ended September 30, FY-L**                          |
|                                                                       |
| Budgetary Resources                                                   |
|                                                                       |
| 2A. Unobligated balance beginning of period (4201B) (4801B) (4901B)   |
| \$ 3,600                                                              |
|                                                                       |
| 3A1. Spending authority from offset collected, earned (4261E) (4262E) |
| (4263E) (4276E) 1,090                                                 |
|                                                                       |
| 6C. Capital Transfers and Redemption of Debt (4151E)                  |
| [(107)]{.underline}                                                   |
|                                                                       |
| 7\. Total Budgetary Resources \$4,583                                 |
|                                                                       |
| Status of Budgetary Resources                                         |
|                                                                       |
| 8\. Obligations incurred (4801E-B) (4901E-B) 4902E) 1, 553            |
|                                                                       |
| 9A1. Balance currently available (4610E) 52                           |
|                                                                       |
| 10D. Other (4450E) [2,978]{.underline}                                |
|                                                                       |
| 11\. Total Status of Budgetary Resources \$4,583                      |
|                                                                       |
| Relationship of Obligations to Outlays                                |
|                                                                       |
| 12\. Obligated balance 400                                            |
|                                                                       |
| 15A. Disbursements (4902) 1,953                                       |
|                                                                       |
| 15B. Collections (-) (4261,4262,4263,4276) 1,090                      |
|                                                                       |
| 15C. Outlays 863                                                      |
|                                                                       |
| 16\. Less: Offsetting receipts                                        |
|                                                                       |
| 17\. Net Outlays \$ 863                                               |
+-----------------------------------------------------------------------+

**Direct Loan and Loan Guarantee Agency**

**FMS 2108: Yearend Closing Statement**

**for Fiscal Year Ended September 30, FY-L**

Column 5 Post Closing Unexpended Balance (1010) 3,030

Column 11 Unobligated Balance (4450, 4610) 3,030

**Direct Loan and Loan Guarantee Agency**

**Budget Program and Financing (P&F) Schedule**

**for Fiscal Year Ended September 30, FY-L**

## BUDGETARY RESOURCES AVAILABLE FOR OBLIGATION

2140 Unobligated balance carried forward, start of year (4201B) (4801B)
(4901B) \$3,600

2440 Unobligated balance carried forward, end of year (4450E) (4610E)
3,030

# 

## NEW BUDGETARY AUTHORITY (GROSS), DETAIL

6800 Spending authority from offsetting collections (4261E) (4262E)
(4263E) (4276E) 1,090

# 

## CHANGE IN OBLIGATED BALANCES 

7240 Obligated balance, start of year (4801B) (4901B) 400

7320 Total outlays (gross) (-) (4902E) (1,953)

# 

## OUTLAYS (GROSS), DETAIL 

8700 Total outlays (4902E) 1,953

**OFFSETS**

8800 Federal sources (4276E) (75)

8840 Non-Federal sources (4261E) (4262E) (4263E) (1,015)

8890 Total offsetting collections (cash) (-) (1,090)

# 

## NEW BUDGET AUTHORITY AND OUTLAYS 

8900 Budget authority (net) (1,090)

9000 Outlays (net) 863

## Quantitative Dollar Information for Credit Program Footnote

This section sets forth the pertinent detail available from the scenario
for the required credit program footnote[^18] and characterizes the loan
guarantee liability as being "pre-Credit Reform."

+-----------------------------------------------------------------------+
| **CREDIT PROGRAM FOOTNOTE**                                           |
|                                                                       |
| *For loans and guarantees obligated before fiscal 1991:*              |
|                                                                       |
| > **Loans Interest Allowance for Net**                                |
| >                                                                     |
| > **Receivable Receivable Losses Receivables**                        |
|                                                                       |
| Direct Loans \$2,410 \$ 335 \$2,475 \$ 270                            |
|                                                                       |
| \(1350\) (1340) (1349, 1359)                                          |
|                                                                       |
| Defaulted Guaran-                                                     |
|                                                                       |
| teed Loans [2,250]{.underline} [670]{.underline} [1,870]{.underline}  |
| [1,050]{.underline}                                                   |
|                                                                       |
| \(1350\) (1340) (1349, 1359)                                          |
|                                                                       |
| Totals \$4,660 \$1,005 \$4,345 \$1,320                                |
|                                                                       |
| \[Must = Bal Sheet\                                                   |
| Amount\]                                                              |
|                                                                       |
| Loan Guarantee Liability for loans guaranteed before fiscal 1992:     |
| \$8,465 \[2180; Must =                                                |
|                                                                       |
| Bal. Sheet Amount\]                                                   |
+-----------------------------------------------------------------------+

#  APPENDIX: REFERENCES

This appendix lists some key references and Web sites for users who want
to obtain additional information.

**OFFICE OF MANAGEMENT AND BUDGET**

-   OMB Bulletin No. 01-09, *Form and Content of Agency Financial
    Statements*

-   OMB Circular No. A-11, *Preparation, Submission, and Execution of
    the Budget*

-   OMB Credit Model

    -   OMB Publications Office at 202-395-7332

    -   Office of Federal Financial Management 202-395-3993

    -   Web site: **www.whitehouse.gov/omb**

**FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD**

Statement of Federal Financial Accounting Standards (SFFAS)

-   SFFAS No. 1, *Accounting for* *Selected Assets and Liabilities*

-   SFFAS No. 2, *Accounting for Direct Loans and Loan Guarantees*

-   SFFAS No. 3, *Accounting for* *Inventory and Related Property*

-   SFFAS No. 7, *Accounting for Revenue and Other Financing Sources*
    (including related implementation guide)

-   SFFAS No. 18, *Amendments to Accounting Standards for Direct and
    Guaranteed Loans*

-   SFFAS No. 19, *Technical Amendments to Accounting Standards for
    Direct and Guaranteed Loans*

-   Statement of Federal Financial Accounting Concepts No. 2, *Entity
    and Display* (as amended by SFFAS No. 7)

Accounting and Auditing Policy Committee, Technical Release No. 3:
*Preparing and Auditing Direct Loan and Loan Guarantee Subsidies Under
the Federal Credit Reform Act*

-   FASAB Staff at 202-512-7350

-   Web site: **www.fasab.gov**

**TREASURY FINANCIAL MANAGEMENT SERVICE**

-   *U.S. Government Standard General Ledger* (codified in *Treasury
    Financial Manual*)

-   *Budgetary Accounting in the Federal Government*

-   Illustrative Scenarios in Accounting for Credit Programs (USSGL
    Division)

-   Present Value Monograph

USSGL Division (Office of Financial Management, Treasury) at
202-874-9980.

[^1]: See OMB Bulletin No. 01-09, dated September 2001, §1.2, p.2.

[^2]: Paragraph 40 of Statement of Federal Financial Accounting
    Standards (SFFAS) No. 2 provides that the accounting may be
    performed on a present value basis at the discretion of program
    agencies. Present value accounting is covered in the other three
    guides in this series.

[^3]: The illustration is for payment of administrative expenses without
    prior obligation through undelivered orders or accounts payable.

[^4]: Interest receivable and loans receivable are broken out by those
    related to direct loans and those related to loan guarantee programs
    to facilitate the separate reporting required. See OMB Bulletin No.
    01-09, footnote 8.

[^5]: See OMB Bulletin No. 01-09, instructions for footnote number 8.

[^6]: Prior illustrative guidance provided for use of USSGL account
    2970, "Resources Payable to Treasury," to represent the difference
    between assets and the other liabilities. This was designated before
    the issuance of SFFAS No. 7, *Accounting for Revenue and Other
    Financing Sources*, which prohibits accrual of unapportioned or
    unlegislated appropriations across years and mandates that
    appropriations used be computed in the same manner as in the Federal
    Budget (see paragraphs 72 and 217 of SFFAS No. 7). In the prior
    guidance, account 2970 took the place of USSGL accounts 3100,
    "Unexpended Appropriations -- Cumulative" and 3310, "Cumulative
    Results of Operations," and no appropriations used were recognized.
    A debit balance in account 2970 was, in effect, a receivable for
    appropriations. In addition, a procedure of closing expenses and
    revenues into account 2970 was illustrated. In compliance with SFFAS
    No. 7, and in recognition of the reality of the long ongoing life of
    many liquidating funds, the guidance in this guide illustrates the
    difference between assets and liabilities in accounts 3100 and 3310,
    and illustrates closing entries for income and expense made into
    account 3310.

[^7]: The figure here is arbitrary. OMB Circular No. A-11, Section
    185.3(k), provides that agencies must transfer unobligated balances
    of liquidating fund entities at fiscal yearend to the General Fund
    of the Treasury unless OMB approves otherwise (see Section 51.12).

[^8]: If a cash deficit were projected instead, the agency may have made
    up the deficit with either appropriations or borrowing. Accounting
    for receipt and use of appropriations is covered in the direct loans
    and loan guarantees guide. Accounting for borrowing is covered in
    the direct loan guide.

[^9]: This is a portion of the beginning balance of USSGL account 4450,
    "Unapportioned Authority."

[^10]: Note that the amount of the authority allotted is limited to the
    apportionment related to anticipated collections, as reflected by
    the balance of USSGL account 4590, "Apportionments - Anticipated
    Resources -- Programs Subject to Apportionment."

[^11]: Some agencies will record both the principal and interest as a
    single amount in USSGL account 1350, "Loans Receivable \[Defaulted
    Guaranteed\]." This is appropriate if subsequent interest charges
    are based on the total amount of principal and interest receivable
    acquired by virtue of the default payment.

[^12]: Though shown separately here for purposes of illustration, the
    agency could combine the entry for this transaction with the
    proprietary entry in transaction 5.

[^13]: Under pre-Credit Reform accounting, the budget recognizes cash
    inflows and outflows related to loan guarantees when they occur,
    rather than when guarantees are made. Since there was no cash to or
    from the Government with this transaction, no budgetary entries are
    prepared. See OMB Circular No. A-11, Sec. 185.3(k), for further
    information. It would be possible to make a proprietary entry
    recognizing the estimated bad debts (default) expense related to the
    guarantee at this time, but the scenario restates bad debt expense
    via an adjusting entry at yearend instead. Either method is
    acceptable.

[^14]: Note that this results in a modification of the loan guarantee
    liability relating to guaranteed loans that have not defaulted.
    Defaulted guaranteed loans receivable on the agency's books are not
    affected by the modification.

[^15]: See the note for this entry in transaction 5, which applies here.

[^16]: Ending Fund Balance With Treasury, \$3,137, - reserve allowed by
    OMB, \$3,030, = \$107.

[^17]: This guide now illustrates revenues and expenses closing into
    USSGL 3310 Cumulative Results of Operations. This may result in the
    liquidating fund having a balance in USSGL 3310. If agencies deem it
    necessary to have a zero balance in USSGL 3310, then a pre-closing
    proprietary entry may be made in the liquidating fund to adjust the
    cumulative results of operations to zero and to create a liability
    to Treasury. Refer to the USSGL TFM Supplement.

[^18]: See OMB Bulletin No. 01-09, footnote 8.