CFR 41, Chapter 101-43.001-23, Personal Property is defined as any property, except real property, records of the Federal Government, and naval vessels of the 1

following categories: Battleship . . . . .

1

April 23, 1998

(Revised August 1998)

CASE STUDY - Disposition of personal property1

NOTE:

C 40 USC, 481(c), “In acquiring personal property, any executive agency, under regulations to be prescribed by the

Administrator, subject to regulations prescribed by the Administrator for Federal Procurement Policy pursuant to the Office of

Federal Procurement Policy Act may exchange or sell similar items and may apply the exchange allowance or proceeds of

sale in such cases in whole or in part payment for the property acquired . . . . . .”

C According to OMB, the Federal Property and Administrative Services Act (FPASA) of 1949 gives all agencies, unless directed

otherwise in their specific legislation, authority to collect proceeds from sale of personal property which can be applied to

replace similar property during the fiscal year in which the property is sold and one fiscal year thereafter. The collection will be

brought in as an offsetting collection on line 3 of SF133.

Assumption: 

C For illustrative purpose the calender year is used for the accounting period.

C The case study illustrated is a very simple and basic scenario for annual appropriation. This model may be used for multi year

or no year accounts when applicable. 

C In reality the acquistion and the sale of property probably will occur within several years. However, for this illustration the 

purchase of the original equipment was made in year 1 (expired) and the sale of original equipment and the purchase of

replacement property were made in year 2 (unexpired).
2

YEAR 19X1

EVENT DESCRIPTION ANNUAL APPROPRIATION F3845 - PROCEEDS OF SALE,

(EXPIRED) PERSONAL PROPERTY (CLEARING

ACCOUNT)

1) An agency receives appropriations and it

is apportioned and allotted 1010 FBWT 2,000 

Proprietary

3100 Unexp App 2,000

Budgetary

4119 Other Appro Realiz 2,000

4450 Unapportioned auth ava 2,000

4450 Unapportioned auth ava 2,000

4510 Apportionment 2,000

4510 Apportionment 2,000

4610 Allotments 2,000

2) $1,700 is obligated to purchase 

equipments A, B and C (original) 

Proprietary

None

Budgetary

4610 Allotments 1,700

4801 Undel Ord - unpd 1,700
3

3) The agency makes following purchases

on 3/30/X1: 1750 Equipment 1,700

Equipment A for $600 1010 Fund Bal w Trea 1,700

Equipment B for $400 

Equipment C for $700 3100 Unexpended approp 1,700

Proprietary

5700 Appro Used 1,700

Budgetary

4801 Undel Ord - unpd 1,700

4902 Exp Authority - pd 1,700

4)To record depreciation expense for the

year (12/31/X1) 6710 Depreciation exp 243

Equipment A $10/month 1759 Acc Dep 243

Equipment B $ 5/month

Equipment C $12/month

$27 x 9 = $243

Proprietary

Budgetary

None
4

YEAR 19X1 PRECLOSING TRIAL BALANCE and CLOSING ENTRIES

Proprietary Budgetary

PRECLOSING TRIAL BALANCE PRECLOSING TRIAL BALANCE

1010 Fund Balance with Treasury 300 4119 Other Appropriations Realized 2,000

1750 Equipment 1,700 4610 Allotments - Realized Resources 300

1759 Accumualted Depreciation 243 4902 Expended Authority - Paid 1,700

3100 Unexpended Appropriation 300 $2,000 $2,000

5700 Appropriation Used 1,700

6710 Depreciation expense 243 

$2,243 $2,243

CLOSING ENTRIES CLOSING ENTRIES

5700 Appropriations Used 1,700 4902 Expended Authority 1,700

3310 Cumulative results 1,700 4201 Total Actual Resources collected 300

3310 Cumulative results 243

6710 Depreciation Expense 243 4610 Allotments - realized resources 300

4119 Other Appropriations Realized 2,000

4650 Allotments - expired authority 300
5

YEAR 19X1 - STATEMENTS

STATEMENT OF NET COST

6710 Depreciation Exp 243

Net Cost $243

STATEMENT OF CHANGE IN NET POSITION STATEMENT OF FINANCING

Net Cost 243 Obligation Incurred

Financing Sources

5700 Appropriation used 1,700

Costs Capitalized on the Balance Sheet

Net Result of operation 1,457 

Unexpended Appropriation

3100 300

Net Position Beginning of the Peirod 0 

Net Position End of the Peirod $1,757

4902 Expended Auth - Pd 1,700

Total Obligations as Adjusted Nonbudget Res 1,700

1750 Equipment 1,700

1759 Accumulated Dep ( 243)

Total Resources that Do Not Fund Net Cost 1,457

Net Cost $ 243
 GAO Policy and Procedures Manual (Title VII) dated May 1993, pgs7.5-8,9, “If the sales proceeds are received before an obligation for replacement property 2

has been incurred, . . . . document such proceeds will be used as an appropriation reimbursement to apply against an obligation which will be incurred within the

prescribed time limit, the proceeds should be credited to the appropriate budget clearing account . . . . . The appropriate budget clearing account will be charged

and the appropriation account will be credited when the obligation is subsequently incurred for the replacement property. ”

CFR 41, Chapter 101, section 101-46.304(a), “When the property to be replaced is sold before the acquisition of the replacement property, the proceeds of

such sales will be credited to the agency’s account.”

6

YEAR 19X2

EVENT DESCRIPTION ANNUAL APPROPRIATION F3845 - PROCEEDS OF SALE,

(UNEXPIRED) PERSONAL PROPERTY

(CLEARING ACCOUNT)

A. SALE OF PROPERTY BEFORE AN 2

OBLIGATION OF REPLACEMENT

PROPERTY HAS BEEN INCURRED

5) An agency receives appropriations

and it is apportioned and allotted 1010 FBWT 1,500 

Proprietary

3100 Unexp App 1,500

Budgetary

4119 Other Appro Realiz 1,500

4450 Unapportioned auth ava 1,500

4450 Unapportioned auth ava 1,500

4510 Apportionment 1,500

4510 Apportionment 1,500

4610 Allotments 1,500
7

6) The agency anticipates collection of

$1,100 from a sale of property which is None

apportioned and allotted accordingly.

From Federal source $400 4070 Anticipated coll for Fed 400

From NonFed source $700 4060 Anticipated coll for Nonfed 700

Proprietary

Budgetary

4450 Unapp authority - ava 1,100

4450 Unapp authority - ava 1,100

4510 Apportionment 400

4590 Apportionment - unavailable 700

4510 Apportionment 400

4610 Allotments 400

7) on 1/1/x2 the agency sold Equipment

A for $380 and administrative 1010 Fund bal w Treas 380 1010 FBWT 380

determination has been made to acquire 1759 Acc dep - equip 90 5720 Fin source trans in w/o reimb380

a replacement equipment. 7210 Loss on dis of asset 130

The sales proceed is deposited to the 5730 Fin source trans out w/o reimb 380

F3845- “Sales proceeds, personal 1010 FBWT 380

property”, a clearing account, until

money is needed to acquire a

replacement property. None - There is no budgetary impact because the

Proprietary Proprietary

1750 Equipment 600

Budgetary

cash is immediately transferred to the clearing None

account

Budgetary
8

8)To record obligation incurred for the

Equipment X, a replacement property 1010 FBWT 380 5730 Fin source trans out w/o reimb 380

for $600 on 5/30/X2. 5720 Fin source trans-in w/o reimb 380 1010 FBWT 380

The appropriate budget clearing Budgetary Budgetary

account will be charged and the

appropriation account will be credited

when the obligation is subsequently

incurred for the replacement property.

Proprietary Proprietary

4277 Other actual coll - Fed 380 None

4070 Ant coll from Fed 380

4610 Allotment 600

4801 Undelivered orders - unpd 600

($380 from collections and $220 from

appropriations)

9) On 7/1/X2 agency used $380 from the

sales proceeds of equipment and used an 1750 Equip 600 None

additional appropriation to buy 1010 FBWT 600

equipment X, a replacement property for

$600. 3100 Unexp 220

Proprietary Proprietary

5700 App Used 220

Budgetary

4801 Undelivered ord - unpd 600

4902 Exp Auth - pd 600 None

Budgetary

10) To record depreciation expense for

equipment X for the year on 12/31/X2 6710 Depreciation exp 66

Equipment X $11/month

$11 x 6 = $66

Proprietary

1759 Acc depreciation - equip 66

Budgetary

None
 GAO Policy and Procedures manual dated May 1993, page 7.5-8, “If the sales proceeds are received after and obligation for replacement property has been 3

incurred and within the prescribed time limit, the proceeds may be credited as a direct reimbursement to the appropriation account charged or chargeable for the

replacement property.”

CFR 41, Chapter 101, section 101-46.304 states “ When the replacement property is sold after the acquisition of the replacement property, the proceeds of

such sale may be deposited as a direct reimbursement credit to the appropriation previously charged for the replacement of similar items of personal

property.”

9

B. SALE OF PROPERTY AFTER THE 3

PURCHASE OF REPLACEMENT

PROPERTY

11) On 7/1/X2 Equipment Y, a

replacement property was purchased for 1750 Equip 700

$700. 1010 FBWT 700

Proprietary

3100 Unexp 700

5700 App Used 700

Budgetary

4610 Allotments 700

4902 Expended authority - pd 700

12) To record depreciation expense for

Equipment B for the year on 9/30/X2. 6710 Depreciation exp 45

$5 x 9 = $45

Proprietary

1759 Acc depreciation - equip 45

Budgetary

None
10

13) On 9/30/X2 the agency sold

Equipment B for $350. 1010 Fund bal w Treas 350

Proprietary

1759 Acc dep - equip 90

1750 Equipment 400

7110 Gain on disp of asset 40

Budgetary

4266 Other actual coll - Nonfed 350

4060 Anticip Nonfed coll 300

4590 Apportionment - unavaliable 350

4610 Allotments 350

14) At the end of the year, depreciation

expense for Equipment Y was recorded. 6710 Depreciation exp 90

Equipment Y $15/month

$15 x 6 = $90

Proprietary

1759 Acc depreciation - equip 90

Budgetary

None
 GAO Policy and Procedures Manual, dated May 1993, pg7.5-9, If the sales proceeds are not available for obligation or are not to be applied to replacement 4

purchases, the proceeds will be deposited in the Treasury as miscellaneous receipts in the general funds.

CFR 41, Chapter 101, section 101-46.304, Proceed of sales related to personal property for which an obligation for replacement has not been incurred during

the period of availability following the date of sale, or sales proceeds which for other reasons an agency elects not to apply to replacement costs, shall be

deposited to miscellaneous receipts account.

11

EVENT ANNUAL APPROPRIATION F3845 - PROCEEDS OF TREASURY

DESCRIPTION (UNEXPIRED) SALE, PERSONAL MISCELLANEOUS

PROPERTY (CLEARING RECEIPTS (GENERAL

ACCOUNT) FUND)

C. THE REPLACEMENT

PROPERTY WAS NOT

ACQUIRED4

15) To record depreciation

expense for Equipment C for 6710 Depreciation exp 72

the year on 6/30/X2. 1759 Acc depreciation - equip 72

$12 x 6 = $72

Proprietary

Budgetary

None
12

16) The agency sold the

Equipment C on (7/01/X2). 1010 FBWT 400 5720 Trans in 400

Proprietary Proprietary

1759 Acc dep 180 1010 FBWT 400

7210 Loss 120

1750 Equipment 700

5730 Trans out w/o reim 400 None

1010 FBWT 400

Budgetary

None - There is no budgetary impact because the

cash is immediately transferred to the clearing 

account

Budgetary

17) The agency determined

that the replacement property None 5730 Trans out 400 1010 FBWT 400

will not be acquired and the 1010 FBWT 400 5720 Trans in 400

receipt will be returned to

Treasury miscellaneous receipt None

account. (this would also apply None N/A

to the agency that does not

replace the property within the

prescribed time limit). 

Proprietary Proprietary Proprietary

Budgetary

Budgetary Budgetary
13

YEAR 19X2 PRECLOSING TRIAL BALANCE and CLOSING ENTRIES

Proprietary Budgetary

PRECLOSING TRIAL BALANCE PRECLOSING TRIAL BALANCE

1010 Fund Balance with Treasury 1,230 4060 Anticipated Collections from Nonfed 350

1750 Equipment 1,300 4070 Anticipated Collections from Fed 20

1759 Accumualted Depreciation 156 4119 Other Appropriations Realized 1,500

3100 Unexpended Appropriation 880 4266 Other Actual Collections - Nonfed 350

3310 Cumulative Results 1,457 4277 Other Actual Coll - Fed 380

5700 Appropriation Used 920 4590 Apportionments - Unavailable 350

5720 Fin Source Transfer in 1,160 4610 Allotments - Realized Resources 950

5730 Fin Source Transfer out 1,560 4902 Expended Authority - Paid 1,300

6710 Depreciation expense 273 $2,600 $2,600

7110 Gain on Disosition of Assets 40

7210 Losses on Disposition of Assets 250 

$4,613 $4,613

CLOSING ENTRIES CLOSING ENTRIES

7110 Gains on Disposition of Assets 40 4902 Expended Authority 1,300

5720 Fin Sources Trans in w/o Reimb 1,160 4201 Total Actual Resources collected 930

5700 Appropriations Used 920 4119 Other Appropriations Realized 1,500

3310 Cumulative results 2,120 4266 Other Actual Coll - Nonfed 350

3310 Cumulative results 2,083 4590 Apportionments - Unavaliable 950

5730 Fin Sources Trans out w/o Reimb 1,560 4610 Allotments - realized resources 350

6710 Depreciation Expense 273 4650 Allotments - expired authority 930

7210 Losses on Disposition of Assets 250 4060 Anticipated Collections from Nonfed 350

4277 Other Actual Coll - Fed 380

4070 Anticipated Collections from Fed 20
14

YEAR 19X2 - STATEMENTS

STATEMENT OF NET COST

6710 Depreciation Exp 273

7110 Gains on disposition of asset (40)

7210 Losses on disposition of asset 250 

Net Cost $483

STATEMENT OF CHANGE IN NET POSITION STATEMENT OF FINANCING

Net Cost 483 Obligation Incurred

Financing Sources

5700 Appropriation used 920 Less: Offsetting Collections

5720 Fin Sources Trans in 1,160 4266 Other Actual coll - Nonfed (350)

5730 Fin Sources Trans out (1,560) 4277 Other Actual coll - fed (380) 

Net Result of operation 37 

Increase in Unexpended appropriation

3100 Unexpended app 580

 

Change in Net Position 617

Net Position - Beginning of the Period

3100 Unexpended Appropriation 300 Total Resources that Do Not Fund Net Cost 313

3310 Cumulative Results of Operation 1,457

Net Position - End of the Period $2,374

4902 Expended Auth - Pd 1,300

Transfer in 5720 1,160

Transfer out 5730 (1,560)

Total Obligations as Adjusted Nonbudget Res 170

Costs Capitalized on the Balance Sheet

1750 Equipment (400)

1759 Accumulated Dep ( 87)

Net Cost $483