Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report 

of the United States Government 

Statement of Federal Financial Accounting Standards No. 24 

January 2003 
Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

 THE FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD 

The Federal Accounting Standards Advisory Board (FASAB or "the Board") was established by 

the Secretary of the Treasury, the Director of the Office of Management and Budget (OMB), and 

the Comptroller General in October 1990. It is responsible for promulgating accounting standards 

for the United States Government. These standards are recognized as generally accepted 

accounting principles (GAAP) for the Federal Government. 

An accounting standard is typically formulated initially as a proposal after considering the 

financial and budgetary information needs of citizens (including the news media, state and local 

legislators, analysts from private firms, academe, and elsewhere), Congress, Federal executives, 

Federal program managers, and other users of Federal financial information. The proposed 

standard is published in an exposure draft for public comment. In some cases, a discussion 

memorandum, invitation for comment, or preliminary views document may be published before 

an exposure draft is published on a specific topic. A public hearing is sometimes held to receive 

oral comments in addition to written comments. The Board considers comments and decides 

whether to adopt the proposed standard with or without modification. After review by the three 

officials who sponsor FASAB, the Board publishes adopted standards in a Statement of Federal 

Financial Accounting Standards. The Board follows a similar process for Statements of Federal 

Financial Accounting Concepts, which guide the Board in developing accounting standards and 

formulating the framework for Federal accounting and reporting. 

Additional background information is available from the FASAB: 

 • "Memorandum of Understanding among the General Accounting Office, the Department 

of the Treasury, and the Office of Management and Budget, on Federal Government 

Accounting Standards and a Federal Accounting Standards Advisory Board," Amended 

December 20, 2002. 

 • "Mission Statement: Federal Accounting Standards Advisory Board" 

Federal Accounting Standards Advisory Board 

441 G Street, NW, Suite 6814 

Mailstop 6K17V 

Washington, DC 20548 

Telephone (202) 512-7350 

Fax (202) 512-7366 

www.fasab.gov 
Executive Summary i 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

Executive Summary 

I. Most Statements of Federal Financial Accounting Standards (SFFAS) do not 

state whether they apply to the Government as a whole or components thereof, 

or both. This standard clarifies that all parts of all SFFAS apply to all Federal 

entities (including the consolidated entity) unless a standard specifically 

provides otherwise. 

II. In addition, certain requirements of SFFAS 7, Accounting for Revenue and 

Other Financing Sources and Concepts for Reconciling Budgetary and 

Financial Accounting, are not relevant for the Consolidated Financial Report of 

the United States Government (CFR). SFFAS 7 requires information on 

budgetary resources and a reconciliation of obligations and other resources 

used with the net cost of operations. These requirements, while relevant for 

agencies executing the budget, are not required for the CFR. 

III. This standard requires that new statements be presented in the CFR, but not 

agency or departmental financial statements, regarding net operating revenue 

(or cost), budget surplus (or deficit), and cash. The new statements are 

principal CFR financial statements, and they are to be presented on a 

comparative basis. 
 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

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Table of Contents ii 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

Table of Contents 

Section Page No. 

 

Executive Summary i 

Introduction 1 

Accounting Standards 3 

Appendix A: Basis for Conclusions 5 

Appendix B: Illustrative Statement: Reconciliation of Net Operating Revenue 

 (or Cost) and Unified Budget Surplus (or Deficit) 12 

Appendix C: Illustrative Statement: Statement of Changes in Cash Balance 

From Budget and Other Activities 13 

Appendix D: Statement of Budgetary Resources 14 

Appendix E: Statement of Financing 16 

Appendix F: Glossary 18 
Introduction 1 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

Introduction 

1. Statements of Federal Financial Accounting Standards (SFFAS) usually do 

not state explicitly whether they apply to the Government as a whole, its 

component entities (e.g., departments, agencies, etc.), or both. Statement 

of Federal Financial Accounting Concepts (SFFAC) 1, Objectives of 

Federal Financial Reporting, uses the term “entity” generically to refer, 

depending on the context, to the U.S. Government as a whole, 

organizational component units of the Government, e.g., an agency, or to 

other kinds of potential reporting units such as programs. 

2. Some have assumed that the standards apply to both component entities 

and the Government as a whole, unless otherwise stated. SFFAS 1, 

Accounting for Selected Assets and Liabilities of the Federal Government, 

states that it applies to the Government and its departments and agencies, 

as does SFFAS 8, Supplementary Stewardship Reporting. SFFAC 2, 

Entity and Display, states that Federal entities aggregate into the 

Government entity, which encompasses all the resources and 

responsibilities existing within the component entities. 

3. This standard clarifies that all existing and future standards apply to all 

federal entities unless a standard specifically provides otherwise. 

4. This standard also exempts the CFR from certain provisions of SFFAS 7, 

Accounting for Revenue and Other Financing Sources and Concepts for 

Reconciling Budgetary and Financial Accounting, requiring information 

about budgetary resources and a reconciliation of budgetary obligations 

with the cost of operations from the proprietary accounting system. Such 

information is relevant and meaningful for entities financed with budgetary 

resources but not for the Government as a whole. 

5. In addition, this standard requires new information for the CFR (but not 

component entity financial statements) that reconciles the annual 

proprietary net cost with the unified budget surplus (or deficit), and explains 

the changes in the Government’s cash balance. The information is to be 

presented in new CFR principal financial statements that are to be 

presented on a comparative basis. 

Materiality

6. The provisions of this accounting standard need not be applied to 

immaterial items. 
Introduction 2 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

Effective Date 

7. This amendment is effective for periods beginning after September 30, 

2001. 
Accounting Standard 3 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

Accounting Standard 

 Standards for the Consolidated Financial Report of the U.S. Government 

8. Statements of Federal Financial Accounting Standards (SFFAS) apply to 

all federal entities, that is, to the Government as a whole and to 

component entities∗

, unless provision is made for different accounting 

treatment in a current or subsequent SFFAS. 

Budgetary Information Not Required for the Government as a Whole 

9. SFFAS 7, paragraphs 77-82, requires certain information about 

budgetary resources and about the relationship between budget 

obligations and proprietary net cost of operations. Such information is 

reported in the Statement of Budgetary Resources and Statement of 

Financing, respectively.1

 This information is not required in the 

consolidated financial report of the Government as a whole, and 

accordingly such statements are not required. 

Reconciliation Information 

10. The financial report of the Government as a whole should provide a 

financial statement reconciling net operating revenue (or cost) and the 

annual unified budget surplus (or deficit). The financial statement 

should highlight: 

3⁄4The components of net operating revenue (or cost) that are not part 

of the unified budget surplus (or deficit), including the accrued and 

amortized expenses not included in budget outlays and the accrued 

or other revenue not included in budget receipts; and 

3⁄4The components of the unified budget surplus (or deficit) that are not 

part of net operating revenue (or cost), including budget receipts and 

outlays that are not included in net operating revenue (or cost). 

11. Appendix B provides an illustration of how the reconciliation data could 

be displayed. The illustration is not intended to be prescriptive. 

 

∗ Terms defined in the glossary appear initially in boldface. 1

 See Appendices D and E for illustrations of the statement of budgetary resources and statement of financing from the Office of

Management and Budget’s Bulletin 01-09, Form and Content.
Accounting Standard 4 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

Information about the Unified Budget Surplus or Deficit and Cash 

12. The Government as a whole should provide a financial statement 

explaining how the annual unified budget surplus or deficit relates to the 

change in the Government’s cash. The financial statement should 

highlight: 

3⁄4The components of the unified budget surplus or deficit that are not 

part of the annual change in cash, including non-cash budget 

outlays; and 

3⁄4Items affecting the Government’s cash balance that are not included 

in the budget outlays or receipts. The statement should prominently 

display of the cash inflow and outflow related to the changes in debt 

held by the public and interest accrued and interest paid on debt held 

by the public. 

13. Appendix C provides an illustration of how this information could be 

displayed.The illustrations are not intended to be prescriptive. 

Principal Financial Statements Presented on a Comparative Basis 

14. The financial statements required in paragraphs 10-13 immediately 

above are principal financial statements. These statements and all 

other principal financial statements in the consolidated financial report of 

the Government as a whole should be presented on a comparative 

basis. The current fiscal year amounts should be presented in a column 

adjacent to the amounts for the previous fiscal year. 
Appendix A: Basis for Conclusions 5 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

Appendix A: Basis for Conclusions

15. This appendix summarizes some of the considerations deemed significant by 

the Board in reaching the conclusions in this Statement. It includes the 

reasons for accepting certain approaches and rejecting others. Individual 

members gave greater weight to some factors than to others. 

16. FASAB published the exposure draft Selected Standards for the Consolidated 

Financial Report of the United States Government, in March 2002. The 

exposure draft included questions about each of the three areas of interest: 

(1) whether standards should apply to the Government as a whole as well as 

to component entities; (2) whether the CFR should be exempt from the 

requirement for a Statement of Budgetary Resources and a Statement of 

Financing; and (3) whether new statements should be required for the 

Government as a whole. 

17. The Board received 16 responses as follows: 

Category Federal 

(Civilian) 

Federal 

(Military) 

NonFederal 

Users, academics, and others2 5 

Auditors 1 1 

Preparers and financial 

managers 

8 1 

Standards Apply to the Government as a Whole as Well as to Component Entities 

18. In Statement of Federal Financial Accounting Concepts (SFFAC) 1 Objectives 

of Federal Financial Reporting, the Board uses the term “entity” generically to 

refer, depending on the context, to the Government as a whole, organizational 

component units of the Government, e.g., an agency, or to other kinds of 

potential reporting units such as programs.3

 SFFAC 2, Entity and Display, 

states that Federal entities aggregate into the Federal Government entity, 

which encompasses all the resources and responsibilities existing within the 

component entities.4

 

19. Although Statement of Federal Financial Accounting Standards (SFFAS) 1, 

Accounting for Selected Assets and Liabilities of the Federal Government, 

 

2

 This category includes professional organizations, academics, and private citizens. 

3

 SFFAC 1, fn. 2-3, and par. 212. 

4

 SFFAC 2, par. 38. 
Appendix A: Basis for Conclusions 6 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

states that it is applicable to both the Government as a whole and component 

entities5

, other standards have not explicitly addressed the subject unless 

different treatment was specified. SFFAS 6, Accounting for Property, Plant, 

and Equipment, refers the reader to SFFAC 2, Entity and Display, for 

guidance on the general applicability of federal accounting standards. SFFAS 

8, Supplementary Stewardship Reporting,

6

 explicitly states that it applies to 

the Government and its departments and agencies; and sets an effective date 

for its applicability to component entities but not for the Consolidated Financial 

Report of the U.S. Government (CFR) because more time is needed to 

delineate how the stewardship information would be aggregated. SFFAS 8 

also requires a “current services assessment” for the CFR but not for 

individual reports of its component units. Likewise in SFFAS 17, Social 

Insurance, applicability is addressed because certain requirements for 

component entities are not applicable to, and summarization of certain data is 

allowed for, the CFR. 

20. This standard clarifies that SFFAS apply to all Federal entities unless a current 

or subsequent standard specifically provides otherwise. All of the respondents 

who addressed the issue agreed that the FASAB standards should apply to 

the CFR. Several respondents requested more guidance regarding whether 

the proposed standard affected the FASAB policy whereby “financial 

statements [prepared] in accordance with accounting standards published by 

[the Financial Accounting Standards Board (FASB)] also may be regarded as 

in accordance with GAAP for those entities that have in the past issued such 

financial statements.”7

 The Board did not intend to change and is not 

changing this policy at this time. 

Consolidated Financial Report Exemption from Requirements to Report Certain 

Budgetary Information 

21. All but one of the respondents who addressed the issue agreed that the CFR 

should be exempt from certain provisions of SFFAS 7, Accounting for 

Revenue and Other Financing Sources and Concepts for Budgetary and 

Financial Accounting, requiring a Statement of Budgetary Resources (SBR) 

and the Statement of Financing (SOF). One respondent disagreed, saying that 

the same information, based on one single set of standards, required for 

components should be required for the CFR, and vice versa. That respondent 

believes that the CFR should present the SBR and SOF, because such 

combined budgetary information is relevant and useful to the user of the CFR. 

 

5

 SFFAS 1, par. 14. 

6

 SFFAS 8, par. 38-39. 

7 FASAB News, Jan.-March 2000, p. 2. 
Appendix A: Basis for Conclusions 7 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

 Likewise, the component entities should be required to prepare the new 

statements, the necessary changes being made, as well as the SBR and SOF. 

 

22. SFFAS 7 requires entities “whose financing comes wholly or partially from the 

budget” to provide information on budgetary resources and the status of 

resources, which is presented in the SBR.8

 It also calls for a reconciliation of 

budgetary resources obligated by the entity with the net cost of operations, 

which is presented in the SOF.9

 

23. The Board continues to believe that such information is less relevant or 

meaningful at the level of the CFR. Resources differ between the Government 

as a whole and individual component entities. The exchange and nonexchange revenue and borrowing from the public are the main sources of 

financing for the Government as a whole.10 For component reporting entities, 

however, the sources of financing are provided through the budget process 

and are largely financing sources other than revenue. Appropriations and 

other budget authority provide an agency with the authority to incur obligations 

to acquire goods and services or to provide benefits and grants. Budgetary 

resources are not earned by an entity’s operations and have a different 

character than both exchange revenue and non-exchange revenue.11 Federal 

entities report as an asset their fund balance with Treasury, which is the 

aggregate amount of funds in the entity’s accounts with Treasury for which the 

entity is authorized to make expenditures and pay liabilities. This is an intragovernment item. From the perspective of the Government as a whole, it is not 

an asset. It represents a commitment to make resources available to federal 

departments, agencies, programs, etc.12 

24. The budget process provides the principal basis for planning and controlling 

obligations and outlays by Government entities. Budget execution tracks the 

flow of budgetary resources from the congressional authorizing and 

 

8

 SFFAS 7 (pars. 77-79) requires information, which is presented in the SBR, that includes (1) total budgetary resources available, (2) the 

status of the budgetary resources, including obligations incurred, the available appropriation, borrowing and contract authority at the 

end of the period, any restrictions on the use of unobligated balances of budget authority, the amount of any capital infusion during the 

period, etc.; and (3) outlays. In addition, the entities are required to provide this information for each of their major budget accounts as 

supplementary information.

9

 SFFAS 7 (pars. 80-82) also requires a reconciliation of budgetary obligations and proprietary accounting information, which is presented 

in the SOF. The reconciliation explains the relationship between (1) budgetary resources obligated by the entity during the period and 

other financing sources such as imputed financing, transfers of assets, etc., not included in budget receipts, and (2) the net cost of 

operations. 

10 “Exchange revenue” arises when an entity provides goods and services for a price. “Non-exchange revenue” arises primarily from the 

exercise of the government’s sovereign power to demand payment from the public, such as taxes, duties, fines, etc. 

11 SFFAS 7, par. 24. 12 SFFAS 1, par. 31. 
Appendix A: Basis for Conclusions 8 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

appropriating process, to apportionment, allotment, and obligation of the 

budgetary resources, to the outlay of cash to satisfy those obligations. For the 

most part, obligations and cash, rather than accrual accounting, are the 

bases for budgeting and reporting on budget execution.13

25. Accrual accounting is the basis for proprietary accounting in the Federal 

Government. Proprietary accounting and budgetary accounting are 

complementary. Proprietary accounting provides an understanding of the 

entity’s net position and cost of operations during a period. Federal 

Government financial statements have not been used for planning and control 

as much as they might be. In part, this is because general purpose financial 

reports have not presented budget information with the financial statements in 

a way that helped users relate these two important, but different, types of 

financial information.14 The Board’s objective in requiring new statements in 

the CFR addresses this issue. 

The Government as a Whole Should Provide Information about Net Operating Revenue 

(or Cost), the Budget Surplus (or Deficit), and Cash 

26. The information now required in two new statements serves the basic 

objectives of federal accounting. Objective 115 provides that federal financial 

reporting should assist in fulfilling the Federal Government’s duty to be publicly 

accountable for the money raised through taxes and other means, and for their 

expenditure in accordance with the appropriation laws. Sub-objective 1C 

provides that federal financial reporting should provide information that helps 

the reader to determine how information on the use of budgetary resources 

relates to information on the costs of program operations and whether 

information on the status of budgetary resources is consistent with other 

accounting information on assets and liabilities. 

27. In a new statement of concepts issued contemporaneously with this standard, 

the Board recognizes that the CFR should be understandable to the average 

citizen. The new statements required in this standard were designed with this 

objective in mind. 

28. Although budgetary and proprietary accounting information are 

complementary, both the types of information and the timing of their 

recognition are different, caused by differences in the basis of accounting.16 

 

13 SFFAS 7, par. 25. 14 SFFAS 7, par. 26. 15 SFFAC 1, pars. 112, 119. 
Appendix A: Basis for Conclusions 9 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

29. The new statements required by this standard focus on three important 

elements: (1) the net operating revenue (or cost) from the proprietary 

accounting system, (2) the unified budget surplus (or deficit), and (3) the 

change in the Government’s cash during the period. The information is 

presented in two parts: (1) a reconciliation of the net operating revenue (or 

cost) to the unified budget surplus (or deficit), and (2) a statement of changes 

in cash balance from budget and other activities. 

30. The purpose of the reconciliation information is to report how the proprietary 

net operating revenue (or cost) and the unified budget surplus (or deficit) relate 

to each other. The premise of the reconciliation is that the proprietary and 

budget accounting bases share much data. The reconciliation presents the 

differences between the two systems as reconciling items while moving from 

the proprietary amount to the unified budget surplus or deficit. 

31. The primary purpose of the statement of changes in cash balance from budget 

and other activities is to report how the annual unified budget surplus/deficit 

relates to the change in the Government’s cash balance and debt held by the 

public. It explains why the unified budget surplus or deficit normally would not 

result in an equivalent change in the Government’s cash balance. 

32. All of the respondents who addressed the issue agreed that the new 

information should be required. Most of these respondents offered some 

comments on one or both of the proposed illustrations. 

33. With respect to the terminology used in the statements, several respondents 

said that the term “budget” was unclear. One respondent noted that the 

statements use the unified budget concept, i.e., both on- and off-budget activity 

is included. The respondent noted that there are several other alternatives 

approaches, including on-budget only, the President’s proposed budget, and 

the enacted budget. Another respondent noted that, in the non-Federal 

environment, a budget is a plan, but for the illustrative statements it indicates 

actual results on a budget accounting basis. Also, several respondents 

objected to the use of the term “budget surplus” as being inaccurate since 

there is no surplus on hand to finance future activities at the reporting date, as 

the statement illustrates; and, that the word “surplus” has been eliminated from 

private sector accounting terminology. 

34. The Board has modified the terminology based on these comments. The word 

“unified” now accompanies “budget surplus or deficit” wherever that phrase is 

used. In addition, the word “actual” has been added to the budget line items in 

 16 SFFAC 7, par. 80. 
Appendix A: Basis for Conclusions 10 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

the statements. 

35. With respect to the term “budget surplus,” the Board notes that the term is 

used pervasively in Federal finance and in the popular media. It is defined 

comprehensively in budget publications. The Board believes that most users 

of the CFR have at least a working understanding of the term as an excess of 

the fiscal year’s budget receipts over budget outlays. The statement of 

changes in cash balance from budget and other activities will illustrate how the 

surplus (or deficit) and other activity affected the Government’s cash balance. 

The glossary for this standard will provide the definition. 

36. With respect to the illustrative statement about changes in the cash balance 

(Appendix C in the exposure draft of March 2002, Versions A and B therein), 

most respondents who addressed the question preferred Version B. They said 

that it would be more understandable to the intended users because its 

groupings and subtotal were more logical. 

 

37. One respondent said the FASAB should provide detailed authoritative guidance 

regarding the format of the reconciliation and cash statements before requiring 

them. The respondent was concerned that the reporting requirements are not 

fully developed, and that the FASAB should not require such information until it 

develops and prescribes an authoritative format. The Board weighed the 

benefits of prescribing the format of the statements against the drawbacks of 

placing constraints on the Treasury Department’s future development of the 

statements. The Board believes that it is better at this time to be flexible so 

that the most meaningful display can evolve. 

38. Another respondent asked the Board to clarify that the new statements would 

be principal financial statements. Additional wording to this effect has been 

added to the standard. 

39. Several respondents urged the Board to tie the change in cash on the new 

statement of changes in cash balance to the balance sheet line item and 

accompanying note disclosure, and/or to include beginning and ending cash 

balances on the statement. The Board decided that such information would 

improve the statement and has included it in the illustration in the standard, but 

does not believe that it is necessary to require it as part of the standard. 

40. One respondent said there should be some direct reference to the stewardship 

information on the balance sheet similar to the reference to the notes because 

this would inform the reader about important information not included on the 

balance sheet. Also, this respondent submitted that the term “National Debt” is 
Appendix A: Basis for Conclusions 11 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

unclear. Although the Board does not view this standard as a vehicle to 

address these concerns, it acknowledges the need for additional clarity and 

user friendliness for the CFR. The Board notes that the Treasury Department 

continues to improve the CFR, including the presentation of stewardship 

information. 

Implementation Date 

41. Several respondents said that the FY 2002 implementation date for the 

statements would afford insufficient time to prepare the new statements. 

However, since the Treasury Department was a leader in developing the 

statements and is able to prepare them in FY 2002, and since no additional 

information is required from component entities, this should not be an issue. 
Appendix B: Illustrative Statement: Reconciliation 12 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

(Hypothetical data)

RECONCILIATION OF NET OPERATING REVENUE (OR COST)

AND UNIFIED BUDGET SURPLUS (OR DEFICIT)

for the period ending Sept. 30, 20X2

(in billions of dollars)

[Footnotes below would be to notes to the financial statements and are not provided for this illustration.]

FY 20X2 FY 20X1

Net operating revenue or (cost) (50.0) 46.0 

 Components of net operating revenue (or cost) not part of the of the budget surplus:

Add excess of accrual-basis expenses over budget outlays: 

 Civilian & military employee benefits (Note X1)

 Pensions and retired pay 75.5 74.0

 Retiree health benefits 14.6 14.7

 Other benefits 4.7 4.6 

 Subtotal -- civilian & military employee benefits 94.8 93.3 

 Veteran compensation (Note X1) 62.5 59.0 

 Environmental clean-up (Note X2) 19.6 18.5 

 Other benefit programs (Note X3) 4.0 4.5 

 Other 17.5 18.5 

 Subtotal -- excess of accrual-basis expenses over budget outlays 199.4 192.8 

Add amortized expenses not included in budget outlays:

 Depreciation (Note X7) 15.4 15.0 

Add other expenses that are not reported as budget outlays:

 Premiums paid on buyback of Treasury debt (Note X10) 5.5 1.6

Subtract excess of accrual-basis revenue over budget receipts:

 Accrued tax revenue (Note X5) (0.6) (0.7) 

 Other accrued revenue (Note X8) - 1.0 

Subtract other revenue and gains that are not budget receipts:

 Other revenue and gains (2.3) (2.2) 

 Subtotal: components of net operating revenue (cost) not part 

 of budget surplus 217.4 207.5 

 Components of the budget surplus that are not part of net operating

 revenue (or cost):

Add budget receipts not included in net operating revenue (or cost):

 Principal repayments on pre-credit reform loans 24.0 24.5 

 Decrease in accounts receivable (Note X3) 2.7 3.0 

Subtract budget outlays not included in net operating revenue (or cost):

 Acquisition of capital assets (Note X7) (31.6) (43.0) 

 Acquisition of inventory (Note X6) (11.9) (12.0) 

 Acquisition of other assets (5.4) (7.0) 

 Subtotal -- components of the budget surplus that are not part of

 net operating revenue (or cost) (22.2) (34.5) 

 Other:

Prior period adjustment (Note X17) (4.2) - 

Unified budget surplus (deficit) -- actual 123.0 237.0 
Appendix C: Illustrative Statement: Statement of Changes in Cash Balance 13 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

STATEMENT OF CHANGES IN CASH BALANCE

FROM UNIFIED BUDGET AND OTHER ACTIVITIES

for the Years Ended September 30, 20X2 and 20X1 

(in billions of dollars)

[Hypothetical Data]

[Footnotes below would be to notes to the financial statements and are not provided for this illustration.]

20X2 20X1

CASH FLOW FROM UNIFIED BUDGETED ACTIVITIES

Total unified budgetary receipts -- actual 2,025.0 1,827.0 

Total unified budgetary outlays -- actual (1,788.0) (1,703.0) 

 Unified budget surplus (or deficit) -- actual 237.0 124.0 

Adjustments for non-cash outlays included in the unified budget:

Interest accrued on Treasury debt held by the public 186.0 185.0 

Subsidy expense accrued under direct loan & guarantee programs (Note X1) 3.0 4.0 

 Subtotal - adjustment for non-cash transactions in unified budget 189.0 189.0 

CASH FLOW FROM ACTIVITIES NOT INCLUDED IN UNIFIED BUDGET

Inflows: 

Repayment of principal on direct loans 19.0 15.0 

Decrease/(increase) in miscellaneous assets (Note X2) 1.6 (1.6) 

Seignorage 2.3 2.2

Outflows:

Interest paid by Treasury on debt held by the public (184.4) (187.8) 

New direct loans disbursed (40.0) (34.0) 

Other direct loan transactions (0.7) (1.0) 

Premium on buyback of Treasury debt held by the public (Note X3) (5.5) - 

Default payments on guaranteed loans (4.3) (5.0) 

Other guaranteed loan transactions (0.5) (0.3) 

Increase/(decrease) in deposit fund liability balances (Note X4) (1.2) 0.1 

Increase/(decrease) in miscellaneous liabilities (Note X4) (0.9) 0.5 

Cash flow from non-budget activities (214.6) (211.9)

Cash Flow from Monetary Transactions

Decrease in reserve position in the IMF (Note X5) 6.3 1.2 

Decrease in loans to the IMF - 0.5 

Increase in special drawing rights (Note X5) (4.0) (2.2) 

(Increase)/decrease in other monetary assets (Note X5) (0.9) 0.4 

Cash flow from monetary transactions 1.4 (0.1) 

Cash Flow from Financing

Borrowing from the public (Note X6) 2,010.8 2,002.0 

Repayment of debt held by the public (Note X6) (2,233.5) (2,090.0) 

Cash flow from financing (222.7) (88.0) 

Increase (decrease) in cash balance 13.0 (9.9) 

Beginning cash balance (Note X7) 39.7 52.7 

Ending cash balance (Note X7) 42.8 52.7
Appendix D: Statement of Budgetary Resources (from OMB Bulletin 01-09, September 25, 2001) 14 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003

Department/Agency/Reporting Entity 

COMBINED STATEMENT OF BUDGETARY RESOURCES (page 1 of 2) 

For the Years Ended September 30, 20x2 and 20x1 

(in dollars/millions) 

 20x2 20x2 20x1 20x1  Non-Budgetary Non-Budgetary  Credit Program Credit Program  Budgetary Financing Accounts Budgetary Financing Accounts

Budgetary Resources: 1. Budget authority:  1a. Appropriations received $ xxx $ xxx $ xxx $ xxx  1b. Borrowing authority xxx xxx xxx xxx  1c. Contract authority xxx xxx xxx xxx  1d. Net transfers (+/-) xxx xxx xxx xxx  1e. Other xxx xxx xxx xxx 2. Unobligated balance:  2a. Beginning of period xxx xxx xxx xxx  2b. Net transfers, actual (+/-) xxx xxx xxx xxx  2c. Anticipated Transfers balances xxx xxx xxx xxx 3. Spending authority from offsetting collections:  3a. Earned  1. Collected xxx xxx xxx xxx  2. Receivable from Federal sources xxx xxx xxx xxx  3b. Change in unfilled customer orders  1. Advance received xxx xxx xxx xxx  2. Without advance from Federal sources xxx xxx xxx xxx  3c. Anticipated for rest of year, without advances xxx xxx xxx xxx  3d. Transfers from trust funds xxx xxx xxx xxx

 3e. Subtotal xxx xxx xxx xxx 4. Recoveries of prior year obligations xxx xxx xxx xxx 5. Temporarily not available pursuant to Public Law xxx xxx xxx xxx 6. Permanently not available xxx xxx xxx xxx7. Total Budgetary Resources $ x,xxx $ x,xxx $ x,xxx $ x,xxx
 15 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

Department/Agency/Reporting Entity 

COMBINED STATEMENT OF BUDGETARY RESOURCES (page 2 of 2) 

For the Years Ended September 30, 20x2 and 20x1 

(in dollars /millions) 

 20x2 20x2 20x1 20x1  Non-Budgetary Non-Budgetary  Credit Program Credit Program  Budgetary Financing Accounts Budgetary Financing Accounts

Status of Budgetary Resources: 8. Obligations incurred:  8a. Direct $ xxx $ xxx $ xxx $ xxx  8b. Reimbursable xxx xxx xxx xxx

 8c. Subtotal xxx xxx xxx xxx 9. Unobligated balance:  9a. Apportioned xxx xxx xxx xxx  9b. Exempt from apportionment xxx xxx xxx xxx  9c. Other available xxx xxx xxx xxx 10. Unobligated balance not available xxx xxx xxx xxx 

11. Total Status of Budgetary Resources x,xxx x,xxx x,xxx x,xxx

Relationship of Obligations to Outlays: 12. Obligated balance, net, beginning of period xxx xxx xxx xxx 13. Obligated balance transferred, net (+/-) xxx xxx xxx xxx 14. Obligated balance, net, end of period:  14a. Accounts receivable xxx xxx xxx xxx  14b. Unfilled customer orders from Federal sources xxx xxx xxx xxx  14c. Undelivered orders xxx xxx xxx xxx  14d. Accounts payable xxx xxx xxx xxx 15. Outlays:  15a. Disbursements xxx xxx xxx xxx  15b. Collections xxx xxx xxx xxx

 15c. Subtotal xxx xxx xxx xxx 16. Less: Offsetting receipts xxx xxx xxx xxx17. Net Outlays $ x,xxx $ x,xxx $ x,xxx $ x,xxx
Appendix E: Statement of Financing (from OMB Bulleting 01-09, September 25, 2001) 16 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003

Department/Agency/Reporting Entity 

CONSOLIDATED STATEMENT OF FINANCING (Page 1 of 2) 

For the Years Ended September 30, 20x2 and 20x1 

(in dollars /millions) 

 20x2 20x1 

Resources Used to Finance Activities: 

Budgetary Resources Obligated 

 1. Obligations incurred $ xxx $ xxx 

 2. Less: Spending authority from offsetting collections and recoveries xxx xxx

 3. Obligations net of offsetting collections and recoveries xxx xxx

 4. Less: Offsetting receipts xxx xxx

 5. Net obligations xxx xxx 

Other Resources 

 6. Donations and forfeitures of property xxx xxx 

 7. Transfers in/out without reimbursement (+/-) xxx xxx 

 8. Imputed financing from costs absorbed by others xxx xxx 

 9. Other (+/-) xxx xxx

 10. Net other resources used to finance activities xxx xxx

11. Total resources used to finance activities x,xxx x,xxx 

Resources Used to Finance Items not Part of the Net Cost of Operations 

12. Change in budgetary resources obligated for goods, 

 services and benefits ordered but not yet provided (+/-) xxx xxx 

13. Resources that fund expenses recognized in prior periods xxx xxx 

14. Budgetary offsetting collections and receipts that do not affect net cost 

 of operations 

14a. Credit program collections which increase liabilities for loan 

 guarantees or allowances for subsidy xxx xxx 

14b. Other xxx xxx 

15. Resources that finance the acquisition of assets xxx xxx 

16. Other resources or adjustments to net obligated resources that do not 

 affect net cost of operations (+/-) xxx xxx

17. Total resources used to finance items not part of the net cost of operations xxx xxx

18. Total resources used to finance the net cost of operations x,xxx x,xxx
Appendix E: Statement of Financing (from OMB Bulleting 01-09, September 25, 2001) 17 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003

Department/Agency/Reporting Entity 

CONSOLIDATED STATEMENT OF FINANCING (Page 2 of 2) 

For the Years Ended September 30, 20x2 and 20x1 

(in dollars /millions)

 20x2 20x1 

Components of the Net Cost of Operations that will not Require or Generate Resources in the 

Current Period: 

 Components Requiring or Generating Resources in Future Periods: 

 19. Increase in annual leave liability xxx xxx 

 20. Increase in environmental and disposal liability xxx xxx 

 21. Upward/Downward reestimates of credit subsidy expense (+/-) xxx xxx 

 22. Increase in exchange revenue receivable from the public xxx xxx 

 23. Other (+/-) xxx xxx

 24. Total components of Net Cost of Operations that will require or 

 generate resources in future periods xxx xxx 

 Components not Requiring or Generating Resources:

 25. Depreciation and amortization xxx xxx 

 26. Revaluation of assets or liabilities (+/-) xxx xxx 

 27. Other (+/-) xxx xxx

 28. Total components of Net Cost of Operations that will not require or 

 generate resources xxx xxx

 29. Total components of net cost of operations that will not require or generate resources 

 in the current period x,xxx x,xxx

 30. Net Cost of Operations $ x,xxx $ x,xxx
Appendix F: Glossary 18 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003

GLOSSARY 

The definitions for the entries below are taken from FASAB’s Consolidated Glossary unless otherwise noted. 

Accrual Accounting – Records the effects on a reporting entity of transactions and other 

events and circumstances in the periods in which those transactions, events, and 

circumstances occur rather than only in the periods in which cash is received or paid by the 

entity. Accrual accounting is concerned with an entity’s acquiring of goods and services and 

using them to produce and distribute other goods and services. It recognizes that the buying, 

producing, selling, distributing, and other operations of an entity during a period, as well as 

other events that affect entity performance, often do not coincide with the cash receipts and 

payments of the period. Compare with cash accounting. [See Financial Accounting Standards 

Board Statement of Financial Accounting Concepts (SFAC) No. 4, Objectives of Financial 

Reporting by Nonbusiness Organizations, paragraph 50, and SFAC No. 6, Elements of 

Financial Statements, pars. 139-141, 144-5; and Congressional Budget Office, Glossary of 

Budgetary and Economic Terms, “Accrual Accounting.”]

Allotment – A distribution made within an entity of amounts available for obligation. [See OMB 

Bulletin A-34, Instructions on Budget Execution, Section 11, Terms and Concepts, “Allotment.”] 

Apportionment -- A distribution made by OMB of amounts available for obligation in an 

appropriation or fund account into amounts available for specified time periods, programs, 

activities, projects, objects, or combinations thereof. The apportioned amount limits the 

obligations that may be incurred. The recipient entity normally allots the apportionment among 

organizational units. 

Appropriation -- See Budget Authority 

Budget – The Budget of the United States Government setting forth the President’s 

comprehensive financial plan for allocating resources. The Government uses the budget 

system to allocate resources among its major functions and individual programs. The budget 

process has three main phases: formulation, congressional action on the budget, and 

execution. Some presentations in the budget distinguish between “on-budget” and “off-budget” 

totals. “On-budget” totals reflect the transactions of all Government entities except those 

excluded from the unified budget totals by law. Likewise, “off-budget” totals reflect the 

transactions of Government entities that are excluded from the unified budget totals by law. 

Currently excluded are the social security trust funds and the Postal Service Fund. The on- and 

off-budget totals are combined to derive unified or consolidated totals for Federal activity. The 

budget amounts and references in this exposure draft refer to the unified budget. [See FY 2003 

Budget of the United States Government: Analytical Perspectives, “Budget System and 

Concepts and Glossary.”] 
Appendix F: Glossary 19 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

 Budget Authority -- Authority provided by Federal law to incur financial obligations that will 

result in immediate or future outlays. Specific forms of budget authority include: 

Appropriations – In most cases, authority provided by law permitting Federal agencies to 

incur obligations and make payments for specified purposes. 

Borrowing Authority – Authority to incur obligations and to borrow, usually from the 

Treasury Department to liquidate the obligations. Borrowing is repaid in due course by the 

Federal entity from other resources. 

Contract Authority – Authority to incur obligations in conjunction with a contract for goods 

or services, with subsequent appropriation or collection to liquidate the obligation. 

Spending Authority from Offsetting Collections – Authority to incur obligations against 

collections credited to a specific expenditure account; and to make payments using the 

collections. 

Budget Obligation – See Obligation below. 

Budget Outlay – See Outlay below. 

Budget Receipt – See Receipt below. 

 

Budget Surplus or Deficit, Unified – The unified budget surplus is the excess of budget 

receipts over budget outlays during a fiscal year and a deficit is the excess of budget outlays 

over budget receipts during a fiscal year. [See FY 2003 Budget of the United States 

Government: Analytical Perspectives, “Budget System and Concepts and Glossary.”] 

Budget, Unified – The budget presents combined on- and off-budget totals to derive totals for 

Federal activity, which is sometimes called the unified budget. The off-budget receipts and 

outlays of the Social Security trust funds and the Postal Service Fund are added to the onbudget receipts and outlays to calculate the unified budget totals.

Budgetary Accounting – The system that measures and controls the use of resources 

according to the purposes for which budget authority was enacted; and, that records receipts 

and other collections by source. It tracks the use of each appropriation for specified purposes 

through the various stages of budget execution from appropriation to apportionment and 

allotment to obligation and eventual outlay. 

Budgetary Resources – The amount of authority given to an agency allowing it to incur 

obligations. 
Appendix F: Glossary 20 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

 Cash Accounting – A system of accounting in which revenues are recorded when received in 

cash and expenses or expenditures are recorded when cash is disbursed. [See Financial 

Accounting Standards Board Statement of Financial Accounting Concepts No. 4, Objectives of 

Financial Reporting by Nonbusiness Organizations, paragraph 50; and Congressional Budget 

Office, Glossary of Budgetary and Economic Terms, “Cash Accounting.”] 

Component Entities – The term “component entity” is used to distinguish between the U.S. 

Federal Government and its components. The U.S. Federal Government as a whole is 

composed of organizations that manage resources and are responsible for operations, i.e., 

delivering services. These include major departments and independent agencies, which are 

generally divided into suborganizations, i.e., smaller organizational units with a wide variety of 

titles, including bureaus, administrations, agencies, and corporations. (SFFAC No. 2, Entity and 

Display, pars. 11-12). Use of “component entity” in this standard is only intended to distinguish 

between the U.S. Federal Government’s consolidated financial statements and financial 

statements of its components. [See FASAB exposure draft of Technical Bulletin, Assigning 

Costs and Liabilities to Agencies that Result from Legal Claims against the Federal 

Government, fn. 2.]

Financing Sources, Other – Inflows of resources other than exchange and nonexchange 

revenue, including appropriations used, transfers of assets from other Government entities, and 

imputed financing. [See SFFAS 7, Accounting for Revenue and Other Financing Sources and 

Concepts for Reconciling Budgetary and Financial Accounting, paragraph 70.]

Imputed Financing – Financing provided to the reporting entity by another Government entity 

covering certain costs incurred by the former. For example, part of Federal employee 

retirement benefits have been paid by the Government’s central personnel office. A reporting 

entity would recognize the full accruing cost of the benefits as well as the imputed financing so 

provided. [See SFFAS 7, Accounting for Revenue and Other Financing Sources and Concepts 

for Reconciling Budgetary and Financial Accounting, paragraph 73.] 

Net Cost of Operations – Total costs incurred by the reporting entity less exchange revenue 

earned during the period. This is the “bottom line” of the statement of net costs. [See SFFAC 2, 

Entity and Display, pars. 86-99 and Appendix 1-B; and OMB Bulletin 01-09, Form and Content, 

Section 4.8, “Net Cost of Operations.”] 
Appendix F: Glossary 21 

Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003 

 Net Operating Revenue (or Cost) – At the CFR level, the difference between the net cost of 

operations and, essentially, all non-exchange revenue. 

Nonexchange Revenue – Inflows of resources to the Government that the Government 

demands or that it receives by donations. The inflows that it demands include taxes, duties, 

fines, and penalties. 

Obligation – Following the enactment of budget authority and the completion of required 

apportionment action, Government agencies incur obligations to make payments. Obligations 

are binding agreements that will result in outlays immediately or in the future. Obligations 

include, for example: current liabilities for salaries, wages, and interest; contracts for the 

purchase of supplies and equipment, construction, and the acquisition of office space, 

buildings, and land; and other arrangements requiring the payment of money. [See FY 2003 

Budget of the United States Government: Analytical Perspectives, “Budget System and 

Concepts and Glossary“ (Obligations Incurred).] 

Outlays – Outlays are payments to liquidate obligations and generally are recorded on a cash 

basis but also include certain non-cash items such as the estimated subsidy cost of direct loans 

and loan guarantees, and interest accrued on public issues of Treasury debt. 

Principal Financial Statements – See SFFAC 2, paragraph 74, for a listing of the financial 

statements and other information that a financial report should include. The FASAB considers 

principal financial statements an essential part of a reporting entity’s financial reporting, and 

therefore recommends authoritative guidelines for the measurement and presentation of the 

information. [SFFAC 2, Entity and Display, paragraph 71, footnote 12.] 

 

Proprietary Accounting – A process employing accrual accounting (see definition above) and 

financial reporting to show actual financial position and results of operations by accounting for 

assets, liabilities, net position, revenues, and expenses. 

Receipts – Collections that result from the Government’s exercise of its sovereign power to tax 

or otherwise compel payment, and gifts of money to the Government. 

Revenue, Nonexchange – See Nonexchange Revenue above. 

Unified Budget – See Budget, Unified 
Federal Accounting Standards Advisory Board 

Selected Standards for the Consolidated Financial Report of the US Government 

January 2003

FASAB Board Members

David Mosso, Chairman 

Joseph V. Anania, Sr. 

Philip T. Calder 

Claire Gorham Cohen 

John A. Farrell 

Joseph L. Kull 

James M. Patton 

Robert N. Reid 

Alan H. Schumacher 

Task Force Members 

Christine Bonham, General Accounting Office 

Juan Camacho, CFO Fellow and Department of Defense 

Robert Kilpatrick, Office of Management and Budget 

Allan Lund, Financial Management Service 

Marvin Phaup, Congressional Budget Office 

Frank Synowiec, General Accounting Office 

Gary Ward, Financial Management Service 

FASAB Staff

Wendy M. Comes, Executive Director 

Project Staff: 

Richard Fontenrose 

 ____________________________________________________ 

Federal Accounting Standards Advisory Board

441 G Street NW 

Suite 6814 

Mailstop 6K17V 

Washington, DC 20548 

Telephone (202) 512-7350 

FAX (202) 512-7366 

www.fasab.gov 

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U.S. General Accounting Office 

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Washington, DC 20548 

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