33420:'to the exposure draft at its october 2017 meeting. staff did not rely on the number in favor of or',
33421:'opposed to a given position. staff considered each response and weighed the merits of the points raised. the respondents comments',
33422:'are summarized below. a12.the majority of respondents 8 out of 12 generally agreed with the proposed guidance. specifically, respondents believed',
33423:'the tb provided guidance to address areas not directly covered in existing statements and clarifies that assets may be assigned',
33424:'by a reporting entity to itscomponent reporting entitieson a rational and consistent basis. one respondent neither agreed nor disagreed with',
33425:'the proposal. three respondents disagreed with the proposal. certain respondents provided minor suggestions and editorial comments that were incorporated into',
33426:'the final guidance or addressed in the basis for conclusions. a13.fasab staff considered carefully the potential that a major change',
33427:'in practice could result from this guidance. based on initial research and positive feedback from 7 respondents, staff concluded that',
33428:'the guidance fills a void in the literature without causing a major change. specifically, this guidance is permissive and does',
33429:'not require any agency to change accounting practices. it is meant to afford flexibility for federal agencies with complex structures.',
33430:'a14.two respondents that disagreed stated the proposed guidance has the potential to cause a change in accounting practice and conflicts',
33431:'with statement of federal financial accounting concepts 5, definitions of elements and basic recognition criteria for accrualbasis financial statements. although',
33432:'concepts statements guide the boards development of accountingandreportingstandards,the gaaphierarchyprovidesthatstatementsoffederal financial accountingconceptsarenot gaap. instead, conceptsstatementsconstitute other literature and may only be',
33433:'relied upon by financial statement preparers and auditors to resolve specific accounting issues in the absence of gaap literature. page',
33434:'7 technical bulletin 20172 fasab handbook, version 20 06/21 technical bulletin 20172 a15.sffac 5, paragraphs 10 through 16 discuss at',
33435:'a conceptual level associating elements with an entity. based on these concepts, an asset would be recognized by the component',
33436:'reporting entity having a comprehensive relationship to it. if there is no component reporting entity having a comprehensive relationship, then',
33437:'the asset should be reported by the component reporting entitymost responsibleformanagingit. currently,individualstandards addressing asset recognition and related reporting do not',
33438:'provide detailed guidance useful to resolving the question of what entity should report the asset as well as related amounts',
33439:'such as deferred maintenance and repair. a16.staff does not agree that this tb conflicts with sffac 5. this tb provides',
33440:'guidance that would be helpful in resolving assignment of asset questions that were not readily resolved through consideration of concepts',
33441:'level guidance. for complex departments with many specialized subcomponent reporting entities, there would be many cases for which there is',
33442:'no component reporting entity having a comprehensive relationship to the asset. this tb makes explicit that reporting entities should establish',
33443:'a policy for assigning assets. while judgment may be exercised to determine which component reporting entity is most responsible for',
33444:'managing such assets, this tb provides that such judgments should be systematic and rational. a17.two respondents that disagreed requested clarification',
33445:'of the use of transfers as detailed in sffas 7, accounting for revenue and other financing sources. staff added a',
33446:'footnote to clarify the difference between an asset assignment and asset transfer. a18.the majorityof respondents 9 out of 12 also',
33447:'agreed that reporting entities should describe the policiesused to assign significant assets. one respondent neitheragreed nor disagreed with the proposal.',
33448:'two respondents that disagreed with the proposed disclosure requirements stating the proposed requirement would increase the amount of disclosures and',
33449:'related costs. staff notes this guidance is permissive and does not require any agency to change accounting practices. it is',
33450:'meant to afford flexibility for federal agencies with complex structures; the disclosure requirements are for policies used to assign significant',
33451:'assets. board review a19.the board has reviewed this technical bulletin, and a majority of members do not object to its',
33452:'issuance. page 8 technical bulletin 20172 fasab handbook, version 20 06/21 technical bulletin 20172 appendix b: illustration this diagram illustrates',
33453:'how the provisions of this technical bulletin could be applied to organizations. it is presented for illustrative purposes only and',
33454:'is nonauthoritative. it does not: 1. represent actual organizations, 2. provide a thorough analysis of all the facts and circumstances',
33455:'that are needed to reach a conclusion in practice, 3. indicate a preferred method of analyzing facts and circumstances, and',
33456:'4. substitute for the application of professional judgment to actual facts and circumstances. page 9 technical bulletin 20172 fasab handbook,',
33457:'version 20 06/21 technical bulletin 20172 assets may only be assigned by a component reporting entity department to its own',
33458:'subcomponent reporting entities such as bureaus, components, or responsibility segments within the same larger reporting entity or department. in the',
33459:'illustration, this would represent assignments connected with a solid line. assetsmaynot be assigned tocomponent or subcomponent reportingentitiesthat arenot part of',
33460:'the same larger reporting entity. this would prohibit assigning assets across departments. in the illustration, these are depicted with a',
33461:'dashed line. page 10 technical bulletin 20172 fasab handbook, version 20 06/21 technical bulletin 20201: lossallowance for intragovernmental receivables status',
33462:'issued february 20, 2020 effective date effective upon issuance. affects thistb clarifies sffas 1, paragraphs 4052by providingthat recognition of losses',
33463:'applies to both intragovernmental receivables and receivables from nonfederal entities. affected by none. summary this technical bulletin tb clarifies existing',
33464:'standards regarding accounts receivable and related recognition standards and reporting. statement of federal financialaccounting standards sffas 1, accounting for selected',
33465:'assets and liabilities, establishes the definition, recognition, measurement, and disclosure requirements for accounts receivable. sffas 1 provides for two types',
33466:'of receivables: receivables from federal entities, or intragovernmental receivables, and receivables from nonfederal entities. it requires separate reporting of the',
33467:'two types of receivables. this tb clarifies sffas 1 by establishing that even though sffas 1 identifies the two types',
33468:'of receivables, the absence of explicit guidance distinguishing between the accounting of intragovernmental receivables and receivables from nonfederal entities does',
33469:'not mean the standards only apply to receivables from nonfederal entities. this tb also clarifies that recognition of losses, provided',
33470:'in paragraphs 4052 of sffas 1, applies to both intragovernmental receivables and receivables from nonfederal entities. the tb also clarifies',
33471:'sffas 1 by explaining the allowance approach is not a writeoff of a receivable. rather, it is a method for',
33472:'reporting an amount that the entity believes is realizable by requiring only accounts receivable, net of an allowance, to be',
33473:'reported on the financial statements. an allowance recognized in a reporting entitys financial statements does not alter the underlying statutory',
33474:'authority to collect the receivable or the legal obligation of the other intragovernmental entity to pay. this tb facilitates consistent',
33475:'reporting of accounts receivable in accordance with generally accepted accounting principles. page 1 technical bulletin 20201 fasab handbook, version 20',
33476:'06/21 technical bulletin 20201 materiality the provisions of this tb need not be applied to immaterial items. the determination of',
33477:'whether an item is material depends on the degree to which omitting or misstating information about the itemmakesit probable that',
33478:'thejudgment of areasonablepersonrelying on theinformationwould have been changed or influenced by the omission or the misstatement. page 2 technical bulletin',
33479:'20201 fasab handbook, version 20 06/21 technical bulletin 20201 table of contents summary 1 technical guidance 4 scope 4 effective',
33480:'date 6 appendixa:basis for conclusions 7 appendix b:abbreviations 13 page 3 technical bulletin 20201 fasab handbook, version 20 06/21 technical',
33481:'bulletin 20201 technical guidance scope 1. what reporting entities are affected by this technical bulletin tb? 2. this guidance applies',
33482:'to all reporting entities that present general purpose federal financial reports gpffrs, including the consolidated financial report of the u.s.',
33483:'government cfr, in conformance with generally accepted accounting principlesgaap as defined by paragraphs 5 through 8 of statement of federal',
33484:'financialaccounting standards sffas 34, the hierarchy of generally accepted accounting principles, including the application of standards issued by the financial',
33485:'accounting standards board. 3. what accounting practices are addressed in this tb? 4. thistbclarifiesstandardsregardingaccountsreceivableandrelatedrecognitionstandards and reporting. 5. does the absence',
33486:'of explicit guidance distinguishing between the accounting of intragovernmental receivables and receivables from nonfederal entities in the accounts receivable standards',
33487:'in sffas 1, accounting for selected assets and liabilities, mean the standards only apply to receivables from nonfederal entities? 6.',
33488:'no, the absence of explicit guidance distinguishing between or not specifically referring to both the accounting for intragovernmental receivables and',
33489:'receivables from nonfederal entitiesinthe accountsreceivablestandardsdoesnot meanthatthe standardsonlyapplyto receivables from nonfederal entities. 7. paragraph 40 of sffas 1 states, the accounting',
33490:'standard for accounts receivable is set forth below. the standards provided in sffas 1 continue to refer to accounts receivable',
33491:'as such. 8. sffas 1 acknowledges that there are two types of receivables and provides for separate reporting in paragraph',
33492:'42 as follows: separate reporting. receivables from federal entities are intragovernmental receivables, and should be reported separately from receivables from',
33493:'nonfederal entities. similarly, sffas 1 distinguishes between entity and nonentity receivables. 9. however, in making this distinction in paragraph 42,',
33494:'sffas 1 does not imply that the accounts receivable standards will distinguish between intragovernmental receivables and page 4 technical bulletin',
33495:'20201 fasab handbook, version 20 06/21 technical bulletin 20201 receivables from nonfederal entities for other areas, such as recognition of',
33496:'loss allowances or disclosures. instead, sffas 1 consistently refers to receivables or accounts receivable when discussing both types of receivable,',
33497:'just as it addresses recognition of receivables prior to identifying the two types of receivables for separate reporting in paragraph',
33498:'42. the federalaccounting standardsadvisory board fasab or the board made the distinction only when discussing the separate reporting. therefore, other',
33499:'than where indicated, references to receivables and accounts receivable incorporate both intragovernmental receivables and receivables from nonfederal entities. 10. does',
33500:'the guidance regarding recognition of losses provided in paragraphs 4052 of sffas 1 apply to both intragovernmental receivables and receivables',
33501:'from nonfederal entities? 11. yes, guidance regarding recognition of losses provided in paragraphs 4052 of sffas 1 applies to both',
33502:'intragovernmental receivables and receivables from nonfederal entities. as discussed in the previousquestion, the absence of explicit guidance distinguishing between theaccountingforintragovernmentalreceivablesandreceivablesfromnonfederalentitiesin',
33503:'the accounts receivable standards of sffas 1 does not mean the standards only apply to receivables from nonfederal entities. 12.',
33504:'the accounts receivable standards in sffas 1 primarily refer to receivables and do not distinguish between specific types, with the',
33505:'exception of paragraph 42, which provides for separate reporting. sffas 1 details the recognition of receivables, the recognition of loss',
33506:'allowances, and disclosure by referring to receivables and not distinguishing between intragovernmentalreceivablesandreceivablesfromnonfederalentities. paragraph42isthe only paragraph that distinguishes between intragovernmental receivables',
33507:'and receivables from nonfederal entities by providing for the separate reporting of them. 13. is there additional guidance regarding recognition',
33508:'of losses for intragovernmental receivables that should be considered, especially when a statute or law requires that the receivable be',
33509:'reimbursed? 14. whereappropriate,theallowanceforestimateduncollectibleamountsshouldberecognized to reduce the gross amount of receivables to its net realizable value that is, allowance approach. it',
33510:'is important to consider that the standard is to assess whether amounts recognized are realizable and that the allowance approach',
33511:'does not necessarily result in a writeoff of a receivable. instead, it is an adjustment needed to estimate the receivable',
33512:'to its net realizable value for reporting purposes. 15. in paragraph 131 of sffas 7, accounting for revenue and other',
33513:'financing sources and concepts for reconciling budgetary and financial accounting, the board acknowledges in page 5 technical bulletin 20201 fasab',
33514:'handbook, version 20 06/21 technical bulletin 20201 the basis for conclusions that an allowance for intragovernmental receivables may be appropriate,',
33515:'but may not always be needed: 16. the factors and criteria that are considered regarding intragovernmental receivables and recognition of',
33516:'losses should be documented in the reporting entitys departmental policy. 17. as explained, sffas 1 requires only accounts receivable, net',
33517:'of an allowance, to be reportedon thefinancialstatements. itdoesnot requirethewriteoffofareceivable. further, recognizing an allowance on a reporting entitys financial statements does',
33518:'not alter the underlying statutory authority to collect the receivable or legal obligation of the other intragovernmental entity to pay.',
33519:'for example, intragovernmental receivables may represent payments that are required by statute, but this statutory requirement does not, in itself,',
33520:'eliminate the need of reporting an allowance for financial statement presentation. 18. reporting entities are encouraged to disclose information that',
33521:'would provide transparency and explain intragovernmental receivables, such as what the receivables represent and efforts made to collect them. effective',
33522:'date 19. the requirements of this tb are effective upon issuance. the provisions of this technical bulletin need not be',
33523:'applied to immaterial items. page 6 technical bulletin 20201 fasab handbook, version 20 06/21 technical bulletin 20201 appendixa: basis for',
33524:'conclusions the federalaccounting standardsadvisory board fasab or the board has authorized itsstaff to preparetechnical bulletinstoprovide timelyguidance on certainfinancial accounting andreporting',
33525:'problems, in accordancewith the boards rulesof procedure, asamended and restated through october 2010, and the procedures described in fasab technical',
33526:'bulletin 20001, purpose and scope of fasab technical bulletinsand proceduresforissuance. theprovisions of technical bulletins need not be applied to immaterial',
33527:'items. this appendixdiscusses some factors considered significant by staff in reaching the conclusionsin this technical bulletin. it includes the reasons',
33528:'for accepting certain approaches and rejecting others. some factors were given greater weight than other factors. the guidance enunciated in',
33529:'the technical guidance sectionnot thematerial in thisappendixshould govern the accounting forspecific transactions, events or conditions. this guidance may be affected',
33530:'by later statements. the fasab handbook is updated annuallyand includes a status section directing the reader to anysubsequent statements that',
33531:'amend thisguidance. within the text of the statements, the authoritative sections are updated for changes. however, this appendix will not',
33532:'be updated to reflect future changes. the reader can review the basis for conclusions of the amending statement for the',
33533:'rationale for each amendment. project history department of the treasury request a1. the department of the treasury treasury raised a',
33534:'concern regarding the recognition of losses against intragovernmental receivables for example, receivables stemming from transactions among federal entities. treasury did',
33535:'not believe it was appropriate for a reporting entity to recognize a loss allowance for intragovernmental receivables, particularly in cases',
33536:'where the balances are required by statute to be repaid. a2. treasury provided the example that it makes judgment claim',
33537:'payments on behalf of many federal reporting entities. although reporting entities are required, in many cases by statute, to reimburse',
33538:'treasury for some payments, many of these reimbursements are not made in a timely mannerraising questions about collectability. a3. sffas',
33539:'1 indicates that losses should be recognized when it is more likely than not that some or all of the',
33540:'balance will not be collected. treasury requested fasab to review sffas 1 and provide clarifying guidance, noting the language in',
33541:'sffas 1 is vague. specifically, treasury believed sffas 1, paragraph 44 was not clear as to its application to intragovernmental',
33542:'receivables, implying that there could be a delineation in the application of allowance for doubtful accounts intragovernmental receivables from nonfederal',
33543:'entities. page 7 technical bulletin 20201 fasab handbook, version 20 06/21 technical bulletin 20201 a4. specifically, treasury interpreted the absence',
33544:'of explicit guidance to mean fasab has no specific viewon intragovernmental receivables or did not intend to include it in',
33545:'the guidance for recognition of losses. treasury further interpreted the absence of explicit guidance to mean that the accounting for',
33546:'and reporting of losses on intragovernmental receivables should be predicated on the inherent nature of those receivablesoccurring between and among',
33547:'components of a single, legal entity and, in some cases, subject to statutory requirements. consequently, treasury issued a policy memo',
33548:'and the bureau of the fiscal service made system changes to preclude agencies from reporting an allowance for losses of',
33549:'intragovernmental receivables to ensure consistent treatment governmentwide. a5. however, some auditors raised concerns that treasurys proposed policy and system change',
33550:'was inconsistent with gaap. therefore, certain agencies, based on concerns raised by auditors, could not conclude that there was adequate',
33551:'justification to change the accounting policy as suggested by treasury. a6. as a result, treasury requested fasab to review this',
33552:'issue. at a minimum, treasury believed that the intent of sffas 1, with respect to the accounting for and reporting',
33553:'of losses on intragovernmental receivables, was unclear. the board agreed that guidance would resolve any uncertainty regarding sffas 1. current',
33554:'standards a7. sffas1providestheaccountingstandardsforaccountsreceivableandrelatedrecognition and reporting standards in paragraphs 4052 as follows: accounts receivable 40.accounts receivable arise from claims to cash',
33555:'or other assets. the accounting standard for accounts receivable is set forth below. 41. recognition of receivables. areceivable should be',
33556:'recognized when a federal entity establishes a claim to cash or other assets against other entities, either based on legal',
33557:'provisions, such as a payment due date, e.g., taxes not received by the date they are due, or goods or',
33558:'services provided. if the exact amount is unknown, a reasonable estimate should be made. [see sffas 7, paragraph 53 for',
33559:'more.] 42. separate reporting. receivables from federal entities are intragovernmental receivables, and should be reported separately from receivables from nonfederal',
33560:'entities. 43. entity vs. nonentity receivables. receivables should be distinguished between entity receivables andnonentityreceivables.entityreceivablesareamountsthatafederal page 8 technical bulletin 20201 fasab',
33561:'handbook, version 20 06/21 technical bulletin 20201 entity claims for payment from other federal or nonfederal entities and that the',
33562:'federal entity is authorized by law to include in its obligational authority or to offset its expenditures and liabilities upon',
33563:'collection. nonentity receivables are amounts that the entity collects on behalf of the u.s. government or other entities, and the',
33564:'entity is not authorized to spend. receivables not available to an entity are nonentity assets and should be reported separately',
33565:'from receivables available to the entity. 44. recognition of losses due to uncollectible amounts. losses on receivables should be recognized',
33566:'whenit ismore likelythan not that the receivableswillnot be totallycollected. the phrase more likely than not means more than a 50',
33567:'percent chance of loss occurrence. 45. an allowance for estimated uncollectible amounts should be recognized to reduce the gross amount',
33568:'of receivables to its net realizable value. the allowance for uncollectible amounts should be reestimated on each annual financial reporting',
33569:'date and when information indicates that the latest estimate is no longer correct. 46. measurement of losses. losses due to',
33570:'uncollectible amounts should be measured through a systematic methodology. the systematic methodology should be based on analysis of both individual',
33571:'accounts and a group of accounts as a whole. 47. individual account analysis. accounts that represent significant amounts should be',
33572:'individually analyzed to determine the loss allowance. loss estimation for individual accounts should be based on a the debtors ability',
33573:'to pay, b the debtors payment record and willingness to pay, and c the probable recovery of amounts from secondary',
33574:'sources, including liens, garnishments, cross collections and other applicable collection tools. 48. the allowance for losses generally cannot be based',
33575:'solely on the results of individual account analysis. in many cases, information may not be available to make a reliable',
33576:'assessment of losses on an individual account basis or the nature of the receivables may not lend itself to individual',
33577:'account analysis. in these cases, potential losses should be assessed on a group basis. 49. group analysis. to determine the',
33578:'loss allowance on a group basis, receivables should be separated into groups of homogeneous accounts with similar risk characteristics. 50.',
33579:'the groups should reflect the operating environment. for example, accounts receivable can be grouped by: a debtor category business firms,',
33580:'state and local governments, and individuals, b reasons that gave rise to the receivables tax delinquencies, erroneous benefit payments, trade',
33581:'accounts based on goods and services sold, and transfers of defaulted loans to accounts receivable, or c geographic regions foreign',
33582:'countries, and domestic regions. within a group, receivables are further stratified by risk characteristics. page 9 technical bulletin 20201 fasab',
33583:'handbook, version 20 06/21 technical bulletin 20201 examples of risk factors are economic stability, payment history, alternative repayment sources, and',
33584:'aging of the receivables. 51. statistical estimation by modeling or sampling is one appropriate method for estimating losseson groups of',
33585:'receivables. statistical estimation should take into consideration factors that are essential for estimating the level of losses, including historical loss',
33586:'experience, recent economic events, current and forecast economic conditions, and inherent risks. 52. disclosure.agencies should disclose the major categories of',
33587:'receivables by amount and type, the methodology used to estimate the allowance for uncollectible amounts, and the total allowance. a8.',
33588:'the previous board was consistent in the accounts receivable standards language in sffas 1. sffas 1 consistently refers to receivables',
33589:'or accounts receivable because the asset being discussed is accounts receivable. therefore, these terms are used when discussing recognition of',
33590:'receivables, recognition of loss allowances, and disclosures. a9. the only time the distinction is made between intragovernmental receivables and receivables',
33591:'from nonfederal entities is in paragraph 42 of sffas 1, which is specific to the separate reporting of receivables. therefore,',
33592:'there is no indication that a distinction would be made in other circumstances. other factors considered a10.while fasab staff understand',
33593:'treasurys position, staff concluded that this position does notjustifyrecommending that theboardrevisecurrent standards. current standards require the allowance approach and that',
33594:'is not a writeoff of a receivable. instead, it is an adjustment needed to estimate the amount that is realizable.',
33595:'the factors and criteria that are considered regarding intragovernmental receivables and recognition of loss allowances may be complex. a11.an allowance',
33596:'in a reporting entitys financial statements does not alter the underlying statutory authorityto collect the receivable or legal obligation of',
33597:'the other intragovernmental entity to pay. for example, intragovernmental receivables may represent payments that are required by statute. however, the',
33598:'statutory requirement for payment of intragovernmental receivables does not, in itself, eliminate the need for an accounts receivable allowance for',
33599:'financial statement presentation, and the recognition of an allowance does not eliminate the need for the payment or collection of',
33600:'the receivable. a12.therefore, it is important that a reporting entity policy regarding allowances and criteria for assessing collectability be documented.',
33601:'reporting entities should consult with appropriate page 10 technical bulletin 20201 fasab handbook, version 20 06/21 technical bullentin 20201 governmentwide',
33602:'offices to ensure proper monitoring, followup, and other practices are followed to the fullest extent practicable and comply with governmentwide',
33603:'efforts to ensure timely payment and collection of intragovernmental receivables. a13.reporting entities are encouraged to disclose information that would provide',
33604:'transparency and explain intragovernmental receivables, as appropriate. for example, in an effort to demonstrate accountability, reporting entities may choose to',
33605:'disclose information about their efforts to collect, secure funding to settle legally enforceable claims, and resolve disputes, if applicable. reporting',
33606:'entities may also disclose material receivable amounts by reporting entity, an aging of receivables, and a narrative explanation regarding the',
33607:'allowances, if appropriate, including the reason for the allowances for example disputed amounts or stated intent to not pay. summary',
33608:'of outreach efforts and responses a14.the exposure draft ed, loss allowance for intragovernmental receivables, was issued august 30, 2019, with',
33609:'comments requested by october 1, 2019. a15.upon release of the ed, fasab provided notices and press releases to the fasab',
33610:'subscription email list, the federal register, the fasab newsletter, the journal of accountancy, the chief financial officers council, the council',
33611:'of the inspectors general on integrity and efficiency, and committees of professional associations generally commenting on eds in the past',
33612:'for example, the greater washington society of cpas and the association of government accountants financial management standards board. a16.fourteen comment',
33613:'letters were received from preparers, auditors, professional associations, and usersof federal financial information. the board considered responses to the ed',
33614:'at its october 2019 meeting. staff did not rely on the number in favor of or opposed to a given',
33615:'position. staff considered each response and weighed the merits of the points raised. the respondents comments are summarized below. a17.respondents',
33616:'generally agreed with the proposed guidance. specifically, respondents generally believed the tb clarifies guidance covered in existing statements. the respondents',
33617:'generally agreed that the absence of explicit guidance distinguishing between the accounting of intragovernmental receivables and receivables from nonfederal entities',
33618:'in sffas 1 does not mean the standards only apply to receivables from nonfederal entities. a18.respondents also generally agreed that',
33619:'the tb clarifies that recognition of losses provided in paragraphs 4052 of sffas 1 applies to both intragovernmental receivables and',
33620:'receivables from nonfederal entities. in addition, it clarifies that an allowance recognized in page 11 technical bullentin 20201 fasab handbook,',
33621:'version 20 06/21 technical bullentin 20201 a reporting entitys financial statements does not alter the underlying statutory authority to collect',
33622:'the receivable or legal obligation of the other intragovernmental entity to pay. a19.althoughcertainrespondents agreed with theguidance, someexpressedconcernaboutthe unresolved intragovernmental eliminations',
33623:'issue. there is much complexity regarding intragovernmental receivables and payables between federal entities. further, the issues the federalgovernment faces when',
33624:'there are differences prevents proper elimination during the preparation of the consolidated financial statements. specific guidance regarding the elimination process',
33625:'and the related communications between federal agencies regarding the receivable/payable process should come from central federal agencies treasury and the',
33626:'office of management and budget and not contradict fasab standards. the tb encourages reporting entities to disclose information that would',
33627:'provide transparency and explain intragovernmental receivables. a20.two respondents that noted agreement with the proposals suggested the guidance should provide examplesof',
33628:'when a loss foran intragovernmentalreceivable should be recognized. similarly, one respondent that disagreed stated that a loss allowance should not',
33629:'apply to a particular type of transaction. developing and documenting criteria for evaluating collectability of intragovernmental receivables is more appropriate',
33630:'by management in departmental policy or guidance. in addition, there is an element of judgment regarding collectability of receivables and',
33631:'this cannot be prescribed or included in specific examples. the guidance in the tb does not mandate an allowance for',
33632:'doubtful accounts for any particular account to be recorded; it requires that an assessment be made. board review a21.the board',
33633:'has reviewed this technical bulletin, and a majority of members do not object to its issuance. page 12 technical bullentin',
33634:'20201 fasab handbook, version 20 06/21 technical bullentin 20201 appendix b:abbreviations ed exposure draft fasab federalaccounting standardsadvisory board gaap generallyaccepted',
33635:'accounting principles sffas statement of federal financialaccounting standards tb technical bulletin page 13 technical bullentin 20201 fasab handbook, version 20',
33636:'06/21 federal financialaccounting andauditing technical release 1: audit legal representation letter guidance status issued march 1, 1998 effective date for',
33637:'fiscal periods beginning after september 30, 1997 affects none. affected by none. related guidance interpretation 2, accounting for treasury judgment',
33638:'fund transactions: an interpretation of sffas 4 and sffas 5 summary management of the federal reporting entity is responsible for',
33639:'adopting policies and procedures to identify, evaluate and account for litigation, claims and assessments as a basis for the preparation',
33640:'of financial statements, including those handled by outside legal counsel. management is responsible for reporting loss contingencies in accordance with',
33641:'the requirements of statement of federal financialaccounting standards no.5. this may require consultation by management and its legal department with',
33642:'doj, as well as other outside legal counsel. the auditor should request that management send a letter of audit inquiry',
33643:'to legal counsel with whom management has consulted concerning litigation, claims and assessments. management of the federal reporting entity and',
33644:'its legal department are responsible for providing the auditor with a legal representation letter. page 1 technical release 1 fasab',
33645:'handbook, version 20 06/21 technical release 1 table of contents page summary 1 issue 3 background 3 recommended implementation guidance',
33646:'3 references 5 page 2 technical release 1 fasab handbook, version 20 06/21 technical release 1 issue: who should be',
33647:'the source of audit legal representation letters in cases where department of justice attorneys are handling legal matters on behalf',
33648:'of other federal reporting entities? background: this issue was raised by the department of justice doj in relation to interpretation',
33649:'no. 2, accounting for treasury judgment fund transactions, issued by the federalaccounting standardsadvisory board fasab, however it is applicable to',
33650:'any situation where outside legal counsel is handling legal matters on behalf of a federal reporting entity. fasab interpretation no.',
33651:'2 states that the federal entity’s management, as advised by the justice department, must determine whether it is probable that',
33652:'a legal claim will end in a lossfor the federal entity and the loss is estimable. doj is concerned that',
33653:'the language in the interpretation will lead agencies to conclude that doj is the sole source of audit legal representationlettersin',
33654:'caseswheredojattorneysare handling legal mattersonbehalf ofother federal reporting entities. recommended implementation guidance management of the federal reporting entity is responsible for',
33655:'adopting policies and procedures to identify, evaluate and account for litigation, claims and assessments as a basis for the preparation',
33656:'of financial statements in accordance with the requirements of the chief financial officersact of 1990 and the government management reformact',
33657:'of 1994. these include litigation, claims and assessments handled by legal counsel outside of the federal reporting entity’s legal department.',
33658:'management of the federal reporting entity is responsible for ensuring that loss contingencies, including those arising from litigation, claims and',
33659:'assessments, are presented in the financial statements in accordance with the requirements of statement of federal financialaccounting standards no.5, accounting',
33660:'for liabilities of the federal government. this may require consultation by management and its legal department with doj, as well',
33661:'as other outside legal counsel, to ensure the accuracy and completeness of the presentation of matters related to litigation, claims',
33662:'and assessments in the federal reporting entity’s financial statements. such consultation may include requesting a list of pending litigation, claims',
33663:'and assessments from doj or other outside legal counsel. arepresentation letter from legal counsel to the auditor, in response to',
33664:'a letter of audit inquiry from management to legal counsel, is the auditor’s primary means of corroborating the information furnished',
33665:'by management concerning the accuracy and completeness of litigation, claims and assessments. the auditor should request that management send a',
33666:'letter of audit page 3 technical release 1 fasab handbook, version 20 06/21 technical release 1 inquiry to legal counsel',
33667:'with whom management has consulted concerning litigation, claims and assessments. amateriality limit for the legal representation letter is generally established',
33668:'in the letter of audit inquiry, based on an understanding between management and the auditor. management of the federal reporting',
33669:'entity and its legal department are responsible for providing the auditor with a legal representation letter. the legal representation letter',
33670:'should cover all litigation, claims and assessments pertaining to the federal reporting entity, including matters handled by doj or other',
33671:'outside legal counsel on behalf of the federal reporting entity. the legal representation letter provided to the auditor by the',
33672:'federal reporting entity’s legal department, or inside counsel, mayprovide sufficient evidential matter for the auditor. in certain circumstances the auditor',
33673:'may also need supporting legal representation from outside counsel. sectionaui 337.26 of theaicpacodification of statements onauditing standards provides the following',
33674:'guidance for situations where inside counsel is handling litigation, claims and assessments either exclusive of or in conjunction with outside',
33675:'counsel: audit inquiry letters should be sent to those lawyers, which may be either inside or outside lawyers, who have',
33676:'the primary responsibility for, and knowledge about, particular litigation, claims and assessments. if inside counsel is handling litigation, claims and',
33677:'assessments exclusively, their evaluation and response ordinarily would be considered adequate. similarly, if both inside and outside lawyers have been',
33678:'involved in the matters, but inside counselhasassumedprimaryresponsibilityforthematters, insidecounsel’sevaluationmay well be considered adequate. however, there maybecircumstanceswherelitigation, claims and assessments involving substantial',
33679:'overall participation by outside lawyers are of such significance to the financial statements that the auditor should consider obtaining the',
33680:'outside lawyers’ response that they have not formulated a substantive conclusion that differs in any material respect from inside counsel’s',
33681:'evaluation, even though inside counsel may have primary responsibility. in those circumstances where the auditor determines that a legal representation',
33682:'letter is needed from doj, or other outside legal counsel, to support the federal reporting entity’s legal representation letter, the',
33683:'federal reporting entity’s management, in conjunction with its legal department, would request such representation in a letter of audit inquiry.',
33684:'the federal reporting entity would provide doj with its description and evaluation of the possible outcome of the case in',
33685:'question, and request that the doj lawyer respond directly to the auditor. if the federal reporting entity is not sufficiently',
33686:'knowledgeable of the case to provide a description and evaluation, the dojlawyerwould be requestedtoprovidea descriptionandevaluation directlyto the auditor. such requests',
33687:'to doj should be case specific and directed to the lead doj lawyer handling the case. to meet the reporting',
33688:'deadlines for audited financial statements, there should be early coordination between the auditor and the federal reporting entity’s management and',
33689:'legal department to determine whether supporting legal representations will be needed from doj. page 4 technical release 1 fasab handbook,',
33690:'version 20 06/21 technical release 1 the legal representation letter provided to the auditor by the legal department of the',
33691:'federal reporting entity requires an assertion as to the completeness of the list of litigation, claims and assessments, including matters',
33692:'handled by doj or other outside legal counsel on behalf of the federal reporting entity. the auditor’s consideration of this',
33693:'completeness assertion is based primarily on the assessed effectiveness of the federal reporting entity’s internal control structure for identifying, evaluating',
33694:'and accounting for litigation, claimsand assessments. the auditoralso may need to request additional information from the federal reporting entity, or',
33695:'doj or other outside legal counsel, to obtain evidence about the completeness assertion. such requests to doj or other outside',
33696:'legal counsel should be made through management of the federal reporting entity. further, the auditor should consider whether the audit',
33697:'scope is limited by the inability to obtain sufficient competent evidential matter regarding the completenessassertion for litigation, claims and assessments.',
33698:'references interpretation of federal financialaccounting standards no. 2, accounting for treasury judgment fund transactions statement of federal financialaccounting standards no.',
33699:'5, accounting for liabilities of the federal government aicpacodification of statements onauditing standards,au section 337, inquiry of a client’s lawyer',
33700:'concerning litigation, claims and assessments; andauditing interpretations ofau section 337 the provisions of this technical release need not be applied',
33701:'to immaterial items. page 5 technical release 1 fasab handbook, version 20 06/21 federal financialaccountingandauditing technicalrelease 2: determining probable and',
33702:'reasonably estimable for environmental liabilities in the federal government status issued march 15, 1998 effective date for fiscal periods beginning',
33703:'after september 30, 1997 affects none. affected by sffas 12: definitional change for “probability”. sffas 11: rescinded federal mission pp&e',
33704:'summary agencies that must deal with environmental contamination should first refer to the hierarchy of accounting standards contained in the',
33705:'current office of management and budget omb bulletin on “form and content ofagency financial statements” for guidance. standards issued by',
33706:'governmentaccountability office gao and omb have precedence over other authoritative guidance for federal entities. this technical release supplements the relevant',
33707:'federal standards, but is not a substitute for and does not take precedence over the standards. page 1 technical release',
33708:'2 fasab handbook, version 20 06/21 technical release 2 table of contents page summary 1 introduction 3 section 1: determining',
33709:'“probable”environmental liabilities 4 section 2: determining “reasonably estimable”environmental liabilities 9 appendix i: relevant laws 17 page 2 technical release 2',
33710:'fasab handbook, version 20 06/21 technical release 2 introduction federal agencies are required to recognize a liability when a future',
33711:'outflow or other sacrifice of resources as a result of past transactions or events is “probable” and “reasonably estimable.” this',
33712:'technical release is intended to assist federal agencies in determining probable and reasonably estimable liabilities related to their environmental cleanup',
33713:'responsibilities. agencies that must deal with environmental contamination should first refer to the hierarchy of accounting standards contained in the',
33714:'current office of management and budget omb bulletin on “form and content ofagency financial statements” for guidance. standards issued by',
33715:'governmentaccountability office gao and omb have precedence over other authoritative guidance for federal entities. this technical release supplements the relevant',
33716:'federal standards, but is not a substitute for and does not take precedence over the standards. this technical release includes',
33717:'two sections and an appendix. section 1 will help an agency determine whether its environmentalcontamination meetsthedefinition of probable i.e., a',
33718:'future outflow of resources will be required to clean up the contamination. section 2 offers guidance in quantifying an agency’s',
33719:'liability for cleanup. appendix i lists key laws and regulations relating to environmental contamination. scope this technical release offers guidance',
33720:'based on statements of federal financialaccounting standards sffas, and draws on information from other literature. the applicable federal standards are:',
33721:'sffas no. 6, accounting for property, plant, and equipment sffas no. 5, accounting for liabilities of the federal government sffas',
33722:'no. 61 addresses cleanup costs from federal operations known to result in hazardous waste. sffas no. 6 provides guidance when',
33723:'cleanup occurs at the end of the useful life of the property, plant, and equipment pp&e or at regular intervals',
33724:'scheduled phase cleanup during that life. 1the recognition and measurement provided in sffas 6 are subject to the criteria for',
33725:'recognition of liabilities included in sffas 5. that is, liabilities shall be recognized when the following conditions are met: a',
33726:'past transaction or event has occurred, a future outflow or other sacrifice of resources is probable, and the future outflow',
33727:'or sacrifice of resources is measurable. page 3 technical release 2 fasab handbook, version 20 06/21 technical release 2 sffas',
33728:'no. 5, accounting for liabilities of the federal government, applies to all environmental liabilities not specifically covered in sffas 6,',
33729:'including cleanup resulting from accidents or where cleanup is an ongoing part of operations.2 section 1: determining “probable” environmental liabilities',
33730:'description of issue an agency is required to recognize a liability for environmental cleanup costs as a result of past',
33731:'transactions or events when a future outflow or other sacrifice of resources is probable and reasonably estimable.3 concerns have been',
33732:'raised about when costs associated with environmental damage meet the probable and reasonably estimable criteria. probable is related to whether',
33733:'a future outflow will be required.4 this section addresses only the “probable” part of this requirement; reasonably estimable will be',
33734:'addressed in section 2. key determinants and positions various key factors tests must be considered in determining whether a future',
33735:'outflow of resources from a federal agency for environmental cleanup is probable. the factors are: 1. likely contamination, 2. government',
33736:'related and legally liable, 3. governmentacknowledgedfinancialresponsibility, 2inthecase of cleanup as an ongoing part of operations [i.e., the operation or activity',
33737:'generates hazardous waste that is cleaned up as it is created e.g., hospitals regularly dispose of hazardous materials], a liability',
33738:'may not need to be recognized if the need to cleanup and the full cleanup occur in the same reporting',
33739:'period. however, the total cost of cleanup should be recognized in the period the cleanup need arises. refer to footnote',
33740:'15 for further information. 3this release generally discusses “sites” or “contamination” when referring to environmental contamination. however, property, plant and',
33741:'equipment that requires cleanup because of damaging the environment when being used or at timeofdisposalis includedin thescope . afurther discussion',
33742:'ofissues relatedto pp&e,includingrecognizinga liability for pp&e already in service, is included in section 2 under the heading “guidance foractive sites.”',
33743:'4this release uses sffas no. 5’s definition of “probable,” which is “morelikelythannot” see par. 33 of sffas no. 5. this',
33744:'release applies the contingent liability criteria i.e., probable, reasonably possible, and remote from sffas no. 5 to all environmental liability',
33745:'estimates, whether or not they meet the criteria see par. 36 of sffas no. 5. [see sffas 12 regarding the',
33746:'definition of probable.] page 4 technical release 2 fasab handbook, version 20 06/21 technical release 2 3a. moniesappropriated/transaction occurred,and 4.',
33747:'no known remediation technology exists. diagram1.1illustratestheabove tests. these testsforprobabilityassume that apast transaction or event has occurred i.e., past or present',
33748:'operation, contribution and/or transportation of waste,and applyto both activeand closedsites.anarrative discussion of eachof these testsfor probability follows on diagram 1.1.',
33749:'page 5 technical release 2 fasab handbook, version 20 06/21 technical release 2 diagram 1.1: determination of probable environmental liabilities',
33750:' 􀀀           $  􀀀 $    ',
33751:'                   ',
33752:'     !     $   % &     ',
33753:'    + &  a see discussion on “due care”. b if no known technology exists, then',
33754:'it would be probable to the extent of any required study costs, costs associated with containment, or any other monies',
33755:'obligated or spent. however, given that the actual remediation is not feasible, the actual remediation costs would not meet the',
33756:'probable criteria. page 6 technical release 2 fasab handbook, version 20 06/21 technical release 2 diagram 1.1 shows that there',
33757:'are two primary tracks for determining whether a federal agency’s environmental responsibilities meet the probable criterion. the first track is',
33758:'when contamination isknown, isrelated tofederalgovernment operations,and representsa legalliability. thesecond track iswhen the federal government knowsof contamination, and although the contamination',
33759:'is not government related and the government is not legally liable, the government acknowledges financial responsibility for cleanup. for both',
33760:'tracks, if no known technology exists, then the probability criterion is met only to the extent of likely expenditures e.g.,',
33761:'for study costs and containment. amore detailed discussion of the various components of diagram 1.1 follows. 1. likelycontamination:iftheagencyhasexercisedduecarein determiningthepresenceof contamination',
33762:'and as a result, believes it is unlikely that contamination for which it is responsible exists, then the probability criterion',
33763:'is not met. however, if the relevant agency is aware of contamination, having used the due care criteria see below,',
33764:'then the agency must determine whether the contamination is government related and the federal government i.e., the agency is legally',
33765:'liable. due care refers to a reasonable effort to identify the presence or likely presence of contamination. due care is',
33766:'considered to be exercised if an agency has effective policies and procedures in place to routinely attempt to identify contamination',
33767:'and forward that information to the responsible agency official. procedures that are evidence of the exercise of due care may',
33768:'include, but are not limited to, the following: review of recorded chainoftitle documents including restrictions, covenants and any possible liens',
33769:'and good faith inquiry and investigation into prior uses of the property; investigation of aerial photographs that are available through',
33770:'government agencies that may reflect prior uses; analyses to estimate the existence of uninvestigated sites based on information from known',
33771:'sites; inquiry into records that are available from federal, state, and/or local jurisdictions that show whether there has been a',
33772:'release or potential release of hazardous substances on the property and adjacent property, if suspected contaminators exist; visual site inspection',
33773:'of any portions of the property where environmental contamination is likely or suspected, and investigation of complaints regarding abnormal health',
33774:'conditions. page 7 technical release 2 fasab handbook, version 20 06/21 technical release 2 2. government related and legally liable5.as',
33775:'it relates to environmental damage/contamination, government related events are those where a governmental entity either caused contamination i.e., contributionof wasteorisotherwiserelatedtoit',
33776:'in sucha way that it is legally liable to clean up the contamination. if the agency believes it is more',
33777:'likely than not that it will be legally liable, then the probability criterion is met.6 3. governmentacknowledged financial responsibility: if',
33778:'environmental contamination is not government related, then the agency, under its statutory programmatic authority, must determine whether it is authorized',
33779:'to formally accept financial responsibility for cleanup.7 if the government does not accept financial responsibility, then the probability criterion is',
33780:'not met. 3a. monies appropriated/transaction occurred: if an agency accepts financial responsibility under no. 3 above,8 then the agency determines',
33781:'the extent of probability based on appropriation or authorization legislation and whether a transaction has occurred causing another party to',
33782:'expect payment e.g., contractor has performed cleanup of a site. for example, if the federal government has acknowledged responsibility for',
33783:'cleaning up a site, the cost of which is at $10 million, and $2 million has been appropriated but only',
33784:'$1 million in services have been rendered, probable is only met to the extent of $1 million. in the case',
33785:'of government acknowledged events, both conditions i.e., appropriations or authorization and transaction executed must exist for the probability criterion to',
33786:'be met. 4. no known remediation technology exists: in the case of a government related event, where there is no',
33787:'known technology to clean up a particular site, then known costs, for which the entity is responsible, such as a',
33788:'remedial investigation/feasibility study ri/fs and/or costs to contain the contamination, meet the probability test. with no known 5legally liableis defined,generally,as',
33789:'any duty,obligationor responsibility established by astatute,regulation, or court decision, or where the agency has agreed, in an interagency agreement, settlement',
33790:'agreement, or similar legally binding document, to assume responsibility for cleanup costs. legal liability should be determined in consultation with',
33791:'the entity’s legal counsel. [seeamerican barassociation’s aba statement of policy regarding lawyers responses toauditors’ request for information december 1975. also',
33792:'seeamerican institute of certified publicaccountants aicpa professional standards,auditing standards au section 337c source sas no. 12.] 6federal entities should consider',
33793:'the environmental protectionagency’s epa national priorities list [whichidentifies “potentially responsible parties” prp] when determining probability. 7“thefederalgovernmenthasbroadresponsibility to provide forthe public’s',
33794:'generalwelfare. the federalgovernment has establishedprograms tofulfillmany ofthegeneralneedsof the public and often assumes responsibilities for which it has no prior legal',
33795:'obligation.” statement of federal financialaccounting standards no. 5, ¶ 30. 8this release does not propose a position regarding environmental contamination',
33796:'caused by natural disasters which may become the responsibility of the federal emergency managementagency’s fema. page 8 technical release 2',
33797:'fasab handbook, version 20 06/21 technical release 2 remediation technology, actual remediation is not feasible and therefore the outflow of',
33798:'resources for remediation is not probable. section2:determining“reasonablyestimable”environmental liabilities description of issue an agency is required to recognize a liability for',
33799:'environmental cleanup costs resulting from past transactions or events when a future outflow or other sacrifice of resources is probable',
33800:'and reasonably estimable. concerns have been raised about when costs associated with environmental damage meets the probable and reasonably estimable',
33801:'criteria. reasonably estimable relates to the ability to reliably quantify in monetary termsthe outflow of resources that will be required.',
33802:'this section addresses only the “reasonably estimable” part of this requirement; probable was addressed in section 1.9 key determinants and',
33803:'positions various key factors tests should be considered in determining whether future outflows of resources can be reasonably estimated. the',
33804:'factors are: 1. completion of a remedial investigation/feasibility study ri/fs10 or other study, 2. experience with similar site and/or conditions,',
33805:'and 3. availability of remediation technology. these tests for reasonably estimable are applied after a transaction or event has occurred',
33806:'that meetsthe definition of “probable” asdiscussed in section 1; testsapplytoboth active andclosed sites. the analysis should consider all significant sites,',
33807:'with the information rolled up into an entitywide estimate. cost estimates should be based on current technology. diagram 2.1 on',
33808:'9disclosure requirements when the criteria for reasonably estimable are not met are as follows: the nature of the environmental damage',
33809:'and an estimate of the possible liability, an estimate of the range of the possible liability, or a statement that',
33810:'such an estimate cannot be made. 10aremedial investigation/feasibility study ri/fs is a comprehensive environmental data collection and site characterization study',
33811:'ri that evaluates alternative cleanup actions and recommends one fs. page 9 technical release 2 fasab handbook, version 20 06/21',
33812:'technical release 2 page 10 illustrates the application of these tests. adiscussion of each of the three tests follows diagram',
33813:'2.1. the discussion concludes with issues related to quantification of the estimate and guidance for active sites. overall, it must',
33814:'be emphasized that every effort should be made to develop an estimate. diagram 2.1: determination and quantification of reasonably estimable',
33815:'environmental liabilities fromprobablesection a probable no no 2. experience w/ similarsite and/orconditions? 1. ri/fs or otherstudycompleted? not currentlyreasonably estimablereasonably estimable3.',
33816:'technologyavailable toremediate? remediation not reasonably estimableyesyesnoyes 4. recognize recognize recognize best estimated cost of estimated estimate or low study, if',
33817:'required cost to contain end of range at b current cost b b low end of range could be containment,',
33818:'if containment is chosen as the option to be pursued. a probable refers to track 1 government related which is',
33819:'found in section 1. track 2 government acknowledged is not applicable. b with all tracks, see sffas 6 par. 107111',
33820:'and sffas 5 par. 4042 for disclosure requirements. page 10 technical release 2 fasab handbook, version 20 06/21 technical release',
33821:'2 diagram 2.1 begins with the assumption that costs associated with environmental damage has alreadymet the test forprobable. this isa',
33822:'direct continuation of theleftside trackof diagram1.1 on the definition of probable i.e., the agency has met probable under government related',
33823:'and is legally liable; see section 1. as it relates to the “probable” second track i.e., government acknowledged, probable is',
33824:'only met to the extent that monies have been appropriated or authorized through authorization legislation and costs have been incurred',
33825:'e.g., services rendered. in these situations, a definitive dollar figure has already been determined and an estimate is not required.',
33826:'therefore, the following discussion refers to determining whether something is “reasonably estimable” only as it relates to government related and',
33827:'legally liable. 1. completion of ri/fs or other study: the first test in determining whether costs are reasonablyestimable is to',
33828:'ascertainwhether thereisa completed studyupon which to base an estimate. for example, if a remedial investigation/ feasibility study ri/fs has been',
33829:'completed for a particular site, the ri/fs would form the basis upon which to begin estimating the liability. the fact',
33830:'that an agency does not have a departmentwide comprehensive study completed does not exempt an agency from making its best',
33831:'effort to estimate a liability for financial statement purposes, or for recognizing a liability for that portion of its obligation',
33832:'that can be estimated. if the results of the study indicate that no contamination exists, then probability is not met',
33833:'and the decision process of diagram 2.1 should be considered complete. 2. experience with similar site and/or conditions: if no',
33834:'study has been completed, the next test is to determine whether a site appears to be similar to any other',
33835:'site or condition where experience has been gained through either a completed study or actual remediation. similar sites or conditions',
33836:'could be related to other federal entities or private sector corporations. a“site” is defined as a physical place where contamination',
33837:'has occurred.a “location” can be composed of many sites; a site can contain many “conditions.” it may be practical for',
33838:'an agency to combine similar conditions or sites into one large site or location. if thereisa similar site orcondition with',
33839:'experience gained through actual cleanup and/or a completed study to compare, the estimate for recognizing a liability for a site',
33840:'could be based on the similar experience or conditions. in addition, the estimated cost of a future study if required',
33841:'should be recognized. future studies could result in improved estimates. if there is no comparable site and/or condition, remediation costs',
33842:'for a site would not be considered reasonably estimable at that time, but the agency would recognize the anticipated cost',
33843:'of conducting a future study, if required, plus any other identifiable costs. page 11 technical release 2 fasab handbook, version',
33844:'20 06/21 technical release 2 3. availability of remediation technology:assuming a study has been completed, or an agency or other',
33845:'entity has experience with a similar site and/or condition as noted above, the next test is whether there is technology',
33846:'available to remediate a site. if no remediation technology exists, then remediation costs would not be reasonably estimable, but the',
33847:'agency wouldberequired to recognize thecosts to contain the contamination andanyother relevant costs, such as costs of future studies. if technology',
33848:'is available, then remediation costs are reasonably estimable, and the agency would recognize the best estimate at current cost. if',
33849:'no amount within a range of estimates is a better estimate than any other amount, the minimum amount in the',
33850:'range would be recognized. if the estimate isbased on similar site criteria, the agency would also recognize the anticipated cost',
33851:'of its own ri/fs or other study, if required. in certain instances, the ri/fs or other study may conclude that',
33852:'even though technology does exist to remediate, containment should be considered as one of the options by the agency. if',
33853:'the agency has yet to make a decision and they may in fact choose containment rather than remediation, and assuming',
33854:'containment is not precluded by other involved parties i.e., by epa, individual states and/or local jurisdictions, the agency would consider',
33855:'the estimated cost of containment when calculating the estimated costs to be recognized or disclosed. the agency would calculate an',
33856:'amount to be recognized based on the type and length of containment required.11 if management has not determined what remedial',
33857:'action should be taken for a contaminated active site, the cost of containment at the end of the facility’s useful',
33858:'life, plus the cost of a study, if not yet done, should be considered as the low end of the',
33859:'range of future estimated cleanup costs. 4. quantification of the estimate:according to paragraph 39 of the sffas no. 5 on',
33860:'contingent liabilities, the estimated liability may be a specific amount or a range of amounts.12 if some amount within the',
33861:'range is a better estimate than any other amount within the range, that amount is recognized. if no amount within',
33862:'the range is a better 11rcraresource conservation and recoveryact regulations require owners of hazardous waste disposal facilities to implement postclosure',
33863:'maintenance and monitoring activities for a minimum of 30 years. when developing estimates of these operation and maintenance o&m costs,',
33864:'epagenerally assumes that o&m activities will be required for 30 years. in most instances, containment costs should be determined on',
33865:'the basis of a minimum of 30 years. it would be expected that in the case of nuclear contamination, different',
33866:'triparty agreements, technical problems, or other circumstances may lead to the use of a substantially longer time frame than for',
33867:'typical rcraor cerclacomprehensive environmental response compensation and liabilityact of 1980 sites. 12this release uses sffas no. 5’s definition of “probable,”',
33868:'which is “more likely than not” see par. 33 of sffas no. 5. this release applies the contingent liability criteria',
33869:'i.e., probable, reasonably possible, and remote from sffas no. 5 to all environmental liability estimates, whether or not they meet',
33870:'the criteria see par. 36 of sffas no. 5. page 12 technical release 2 fasab handbook, version 20 06/21 technical',
33871:'release 2 estimate than anyotheramount, the minimumamount in therange isrecognized.according to sffas no. 6, ¶ 95, estimated costs should be',
33872:'based on the cleanup plan, assuming current technology and current cost. changes in environmental liability estimates related to pp&e should',
33873:'be accounted for in accordance with sffas no. 6. for general pp&e, sffas no. 6 requires that the portion of',
33874:'the reestimate related to current and prior periods be recognized as an expense in the period of the change. for',
33875:'stewardship pp&e, sffas no. 6 requires that the change in estimate be expensed for the incremental costs identified in the',
33876:'reestimate and the liability adjusted in the period of the change. where an agency is one of several potentially responsible',
33877:'parties prp’s under cercla and management has determined that more likely than not the agency is legally liable, the agency',
33878:'should include an estimated liability for its: 1 allocable share of the liability for a specific site, and 2 share',
33879:'of amounts related to the site that will not be paid by other prp’s.13 if an agency shares responsibility with',
33880:'nongovernmental prp’s for a government related event, the agency should recognize the share that management believes it is more likely',
33881:'than not the agency is legally liable for.14 where the federal government shares responsibility withnongovernmentalprp’sand agency management hasdecided to accept',
33882:'the nongovernmental prp’s share of the responsibility for the damage i.e., a government acknowledged event, the agency would also recognize',
33883:'a liability for the prp’s share once the criteria of appropriation or authorization legislation and a transaction have occurred, causing',
33884:'another party to expect payment e.g., contractor has performed site cleanup. guidance foractive sites thus far, this technical release has',
33885:'dealt with costs for past environmental contamination of property, plant, and equipment pp&e related to active and closed sites. in',
33886:'addition, sffas no. 6 outlines accounting treatment for future environmental contamination of pp&e at active sites. 13aicpastatement of position sop',
33887:'961, environmental remediation liabilities, page 43 par. 6.2. 14if management determines that an agency should assume responsibility for a portion',
33888:'of another prp’s share of the liability, theagency may recognize areceivable from the other prpwhen the federal entity establishes a',
33889:'claim to cash or other assets against the other prp based on the related legal provisions i.e., a legal instrument,',
33890:'such as a settlement agreement, or other objective, verifiable information. losses on receivables should be recognized when it is more',
33891:'likely than not that the receivables will not be collected in total. page 13 technical release 2 fasab handbook, version',
33892:'20 06/21 technical release 2 the following shows howenvironmentalcleanup costs15 for active sites should be recognized for general and stewardship',
33893:'pp&e under sffas no. 6. general pp&e there are two implementation methods for general pp&e in service at the effective',
33894:'date of the standard. under the first method, the agency would estimate the total cleanup costs based on current cost',
33895:'to perform the cleanup16 that will be required at the end of the pp&e’s useful life. theagencywouldrecognize theestimatedcostasa priorperiodadjustment forthe',
33896:'portionofthe total estimated cleanup costs related to that portion of the pp&e’s useful life that has already expired. to illustrate,',
33897:'assume implementation of sffas no. 6 on october 1, 1996. using the illustration below, and assuming a facility was placed',
33898:'in service at the beginning of fiscal year 1992 with a 20year useful life, the agency would first estimate the',
33899:'total costs based on current cost required to clean up the contaminated facility at the presumed plant closure at the',
33900:'end of fiscal year 2011 $20 billion. from that estimate as of october 1, 1996, the amount that relates to',
33901:'that portion of the pp&e’s useful life that has already expired 4/20 of $20 billion, or $4 billion would be',
33902:'charged to net position and the fiscal year 1996 prorata portion would be charged to expense. 15costs referred to in',
33903:'this section are for decontamination and decommissioning d&d only, not operating costs. d&d costs are those incurred after plants or',
33904:'equipment become inactive and require cleanup. operating costs are period costs that flow through the statement of operations and changes',
33905:'in net position.aliability is not recognized for operating costs. 16current cost should be based on existing laws, technology and management',
33906:'plans sffas no. 6, paragraph 188. page 14 technical release 2 fasab handbook, version 20 06/21 technical release 2 active',
33907:'facility todays date: general pp&e sept. 30, 1996 1 estimate total cleanup costs for facility $20 billion 2 book cleanup',
33908:'costs 3 annually book prorata relatedtoprior useful portion of cleanup costs for life remaining useful life oct 1,1991 1996 2011',
33909:'placed in service beginning with fiscal year 1997, the agency would annually recognize a prorata portion of the estimated total',
33910:'cleanup costs based on the remaining useful life of the subject pp&e. in our example, for fiscal year 1997, for',
33911:'this plant with an estimated remaining useful life of 15 years, the agency would recognize 1/15 of the total estimated',
33912:'remaining cleanup cost of $15 billion, or $1 billion. the probable criterion was met under diagram 1.1 once the pp&e',
33913:'was placed in service. the reasonablyestimable criterion wasmet with the agency’sdevelopment of an overall estimate of total cleanup costs using',
33914:'the process indicated in diagram 2.1. consequently, each years’ allocation of cleanup costs is both probable and reasonably estimable, thus',
33915:'requiring the agency to recognize a liability. the allocation method used for cleanup costs, as described above, is similar to',
33916:'depreciation of general pp&e. changes in estimates of cleanup costs should be accounted for in accordance with the sffas no.',
33917:'6, which requires that the cumulative effect of changes in total estimated cleanup costs related to current and past operations',
33918:'be recognized as expense, and the liability adjusted in the period of the change in estimate. sffas no. 6 allows',
33919:'a second method for recognizing cleanup cost related to general pp&e in service at theeffectivedateof the standard. thealternative methodprovidesthat “ifcostsarenot',
33920:'intended to be recovered primarily through user charges, management may elect to recognize the estimated total [ultimate] cleanup cost as',
33921:'a liability upon implementation of the standard.”17 17sffas no. 6 paragraph 104 page 15 technical release 2 fasab handbook, version',
33922:'20 06/21 technical release 2 for general pp&e placed in service after the effective date of the standard, the agency',
33923:'should estimatethetotalcleanupcosts18 relatedtothepp&eandrecognizeannuallya prorataportionof the costs over the life of the asset. expense recognition shall begin on the date that',
33924:'the pp&e is placed into service. because contaminate land doesnot have auseful lifeand isnot depreciated, it should be treated the',
33925:'same as the facility that is located on the land. for land contaminated in the past, a liability should be',
33926:'recognized for the total estimated cleanup costs. for land expected to be contaminated in the future due to ongoing operations,',
33927:'a portion of estimated total cleanup costs shall be recognized as expense during each period that the associated general pp&e',
33928:'is in operation. if no facility is associated with the land, the land should be treated as stewardship pp&e. sffas',
33929:'no. 6 providesguidance for stewardship pp&e see the following paragraph for a brief summary of stewardship pp&e. stewardship pp&e stewardship',
33930:'pp&e includes federal mission pp&e19, heritage assets, and stewardship land. for stewardship pp&e already in service, according to sffas no.',
33931:'6, on the day the standard is adopted or upon early implementation, the agency would charge net position through a',
33932:'prior period adjustment and recognize a liability for the full amount of the estimated ultimate cleanup costs. for newstewardship pp&e,',
33933:'the agency would recognize an expense and a liability for the total amount of estimated ultimate cleanup costs when the',
33934:'pp&e is placed in service. as with general pp&e, the probable criteria would be determined under diagram 1.1 at the',
33935:'time the standard is adopted or new pp&e is placed in service. likewise, the reasonably estimable criteriafor thetotalultimatecleanup costswould be',
33936:'determined basedondiagram2.1. however, unlike general pp&e, stewardship pp&e is fully expensed once acquisition costs are incurred. sffas no. 6 callsfor',
33937:'the entire ultimate cleanup coststo be expensed when the pp&e isplaced in service. the provisions of this technical release need',
33938:'not be applied to immaterial items. 18according to sffas 6 paragraph 95 the estimate shall contemplate: the cleanup plan, including',
33939:'level of restoration to be performed, current legal or regulatory requirements, and current technology; and current cost which is the',
33940:'amount that would be paid if all equipment, facilities, and services included in the estimate were acquired during the current',
33941:'period. 19the fasab is currently developing an exposure draft that proposes to change the term “federal mission pp&e” to “national',
33942:'defense pp&e” and to alter the definition. [sffas no. 11] page 16 technical release 2 fasab handbook, version 20 06/21',
33943:'technical release 2 appendix i relevant laws this appendix lists some of the laws that relate to environmental cleanup. it',
33944:'is not intended to be a comprehensive list of all pertinent laws. federal agencies should check with their office of',
33945:'general counsel to determine which laws are applicable to their agency. i. principalenvironmentallawstowhichfederalfacilitiesaresubject a. comprehensiveenvironmentalresponsecompensation andliabilityactof1980 cercla, or superfund, and',
33946:'subsequent amendments 1. administered by epa 2. established a program to identify sites national priorities list a. typically abandoned or',
33947:'inactive sites b. can be applied to sites still in operation 3. set up trust fund to cover costs with',
33948:'attempts to recover 4. detailed standards for remediation and settlement provisions and authorized criminal sanctions 5. entities may have “joint',
33949:'and several” liability for cleanup b. resourceconservationandrecoveryactrcra 1. permitsissuedbyepaforfacilitiesusedorbeingusedtomanagehazardous waste includes generating, treatment, storage, and disposal 2. covers both closed',
33950:'and active facilities c. cleanairact d. cleanwateract ii. other environmental laws a. safedrinkingwateract b. toxicsubstances controlact c. federalinsecticide, fungicide, androdenticideact',
33951:'d. pollutionpreventionact1990 e. federalfacilities complianceact f. nuclear regulatoryactandits amendments g. emergencyplanningandcommunityrighttoknowact iv. state laws a. for federal cleanup activities, state',
33952:'standards can apply, which are at least as stringent as federal laws v. foreign laws a. as applicable page 17',
33953:'technical release 2 fasab handbook, version 20 06/21 federal financialaccountingandauditing technicalrelease 3 rescinded: preparing andauditing direct loan and loan guarantee',
33954:'subsidies under the federal credit reformact status issued july 31, 1999 effective date for fiscal periods beginning after september 30,',
33955:'1998 affects none. technical releases 3revised and 6 rescinded technical affected by release 3 in its entirety. technical releases 3revised,auditing',
33956:'estimates for direct loan and loan guarantee subsidies under the federal credit reformactamendments to technical release no. 3 preparing and',
33957:'auditing direct loan and loan guarantee subsidies under the federal credit reform act and technical release 6, preparing estimates for',
33958:'direct loan and loan guarantee subsidies under the federal credit reformactamendments to technical release no.3 preparing and auditing direct loan',
33959:'and loan guarantee subsidies under the federal credit reform act rescinded technical release 3 in its entirety. page 1 technical',
33960:'release 3 fasab handbook, version 20 06/21 federal financialaccounting andauditing technical release 3 revised:auditing estimates for direct loan and loan',
33961:'guarantee subsidies under the federal credit reformact – amendments to technical release no. 3 preparing and auditing direct loan and',
33962:'loan guarantee subsidies under the federal credit reform act rescinding technical release 3: preparing and auditing direct loan and loan',
33963:'guarantee subsidies under the federal credit reform act status issued january 22, 2004 effective date immediately affects technical release 3:',
33964:'preparing and auditing direct loan and loan guarantee subsidies under the federal credit reform act affected by none. related guidance',
33965:'technical release 6: preparing estimates for direct loan and loanguaranteesubsidiesunderthefederal credit reformact – amendments to technical release no. 3 preparing',
33966:'and auditing direct loan and loan guarantee subsidies under the federal credit reform act summary this technical release amends the',
33967:'guidance for auditors to audit credit subsidy estimates provided in technical release 3: preparing and auditing direct loan and loan',
33968:'guarantee subsidies under the federal credit reform act tr3, july 1999. the original technical release july 1999 contained both audit',
33969:'and accounting guidance. technical release 6 contains only the guidance for preparing estimates. page 1 technical release 3 revised fasab',
33970:'handbook, version 20 06/21 technical release 3 revised table of contents page summary 1 accounting and budgeting guidance 4 materiality',
33971:'4 effective date 5 audit tests for direct loan and loan guarantee subsidy estimates 5 appendixa: acceptable sources of documentation',
33972:'for subsidy estimates and reestimates 26 appendix b: technical glossary 28 appendix c: summary of reestimate requirements 34 appendix d:',
33973:'summary of selected reporting requirements 35 page 2 technical release 3 revised fasab handbook, version 20 06/21 technical release 3',
33974:'revised introduction 1. the purpose of this technical release is to amend the guidance for auditors to audit credit subsidy',
33975:'estimates provided in technical release 3: preparing and auditing direct loan and loan guarantee subsidies under the federal credit reform',
33976:'act tr3, july 1999. the original technical release july 1999 contained both audit and accounting guidance. the most significant changes',
33977:'made in this amended tr 3 are 1 the removal of the preparation guidance from this amended tr to only',
33978:'include the audit guidance and 2 procedural changes updating the document to reflect new guidance and changes in terminology in',
33979:'the area of credit reform e.g., sffas 18 & 19; and omb circulara11. concurrent with the issuance of this amended',
33980:'technical release on auditing guidance, technical release 6 is being issued and will contain only the guidance for preparing estimates.',
33981:'2. readers of this technical release should first refer to the hierarchy of accounting standards in statement onauditing standards sas',
33982:'91, federal generallyacceptedaccounting principles hierarchy or seeau411. 3. this technical release includes sections on: planningthecreditsubsidyaudit testing internal control substantive testing',
33983:'of subsidy estimates 4. it also presents four appendices on: acceptable sources of documentation for subsidy estimates and reestimates technical',
33984:'glossary summary of reestimate requirements summary of reporting requirements 5. this technical release does not address loan asset sales and',
33985:'does not provide complete guidance for administrative expenses and pre1992 direct loans and loan guarantees. guidance on these areas can',
33986:'be found in sffas nos. 2, 18, & 19 and omb circular no. a 11 and omb bulletin no. 0109.',
33987:'additional guidance on loan asset sales will be addressed separately in the future. page 3 technical release 3 revised fasab',
33988:'handbook, version 20 06/21 technical release 3 revised background 6. this technical release is designed to provide guidance on the',
33989:'audit of credit subsidy estimates. there are three parts of subsidy: initial subsidy, modifications of subsidy and reestimates of subsidy.',
33990:'this technical release discusses audit methods, both internal control and substantive procedures, that may be used to audit credit subsidy',
33991:'estimates, modifications and reestimates. as complex and varied as credit subsidies are within government, auditor judgment is essential to implementing',
33992:'this guidance. this technical release also provides guidance on acceptable sources of documentation for subsidy estimates and reestimates. accounting and',
33993:'budgeting guidance 7. federal agencies are required to account for direct loans and loan guarantees in accordancewithstatement offederalfinancialaccountingstandardsno. 2, accounting',
33994:'for direct loans and loan guarantees sffas no. 2, sffas no. 18, amendments to accounting standards for direct loans and',
33995:'loan guarantees,andsffasno.19, technical amendments to accounting standards for direct loans and loan guarantees. 8. ombcircularsa11 preparation, submission, and execution of',
33996:'the budget anda129 policies for federal credit programs and nontax receivables provide guidance to agencies on definitions, procedures and rules',
33997:'for calculating subsidy estimates and reestimates for the president’s budget and modification cost estimates, obligation of budget authority for the',
33998:'credit program’s cost, and credit and receivables policy. 9. the credit subsidy calculator csc is a computer program provided to',
33999:'the agencies to calculate the cost of direct loans and loan guarantees using the agencies’ cash flow estimates. theombcirculara11requiresthatallagencieswithcreditprogramsmustuse the',
34000:'csc to discount the credit subsidy estimate and reestimate cash flows that they are responsible for generating. materiality 10. the',
34001:'provisions of this guidance need not be applied to immaterial items. page 4 technical release 3 revised fasab handbook, version',
34002:'20 06/21 technical release 3 revised effective date 11. the guidance outlined in this technical release is effective immediately. audit',
34003:'tests for direct loan and loan guarantee subsidy estimates 12. the overall purpose of auditing the subsidy estimation and reestimation',
34004:'process is to provide reasonable assurance that the reported credit program receivables and related foreclosed property and related allowance for',
34005:'subsidy, liabilities for loan guarantees, and subsidy expense, are reasonably stated in the financial statementsand provide reliable and useful information',
34006:'for decision makers. since the audit should be conducted in three phasesplanning, internal control, and substantive testingthis technical release is',
34007:'organized in the same way. due to the complexity of credit subsidy estimates, thorough planning is key to an effective',
34008:'and efficient audit. the auditor must also assess the agencys internal control and the risk of errors and irregularities that',
34009:'may cause a material misstatement in the financial statements. based on this assessment, the auditor can determine the nature, timing,',
34010:'and extent of substantive testing to determine whether the credit subsidy estimate is reasonable in the context of the financial',
34011:'statements taken as a whole. planning the credit subsidyaudit 13. the audit of credit subsidy estimates should be considered in',
34012:'conjunction with other audit areas, e.g., claims, insurance in force, foreclosed property, premium receipts, and loan sales. in this way,',
34013:'the auditor will be able to leverage off the other audit areas to maximize audit efficiency and effectiveness. when planning',
34014:'the audit of credit subsidy estimates, the auditor must consider the budget preparation process, which generally occurs during the same',
34015:'time as the planning phase, and the impact audit adjustments may have on the budget submission. when planning the nature,',
34016:'timing, and extent of the audit of credit subsidy estimates, the auditor is encouraged to perform the review and testing',
34017:'of the cash flowmodels,asdescribedthroughoutthissection,earlyintheauditprocess. byperforming these audit procedures early in the agency’s audit, any necessary adjustments to the cash flow',
34018:'model can also be made in time to be included in the budget cash flow model. in this way, the',
34019:'audit of the credit subsidy estimates will fulfill the intent of paragraph 17 in sffas no. 2 which states that',
34020:'“the board recognizes the value of having financial accounting support the budget. it endorses the logic underlying credit reform, and',
34021:'it recommends that page 5 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised accounting standards',
34022:'for credit be consistent with budgeting under credit reform.” auditors are encouraged to use their judgment when determining the nature,',
34023:'timing, and extent of tests that will be performed. not all of the tests contained in this technical release will',
34024:'be applicable to all credit programs. 14. during the planning phase, the auditor should focus on four primary objectives: 1',
34025:'understanding the agencys credit subsidy estimate process, 2 identifying key estimate assumptions, 3 identifying material and high risk credit programs,',
34026:'and 4 assessing inherent risk and the effects of information technology on inherent risk. understanding the credit subsidy estimate process',
34027:'15. without a thorough understanding of the agencys credit subsidy estimate process, the auditor is unable to efficiently and effectively',
34028:'audit the loans receivable and the related allowance, the liability for loan guarantees, and the subsidy expense, in accordance with',
34029:'applicable auditing standards. to gain an understanding of the credit subsidy process, the auditor should a. review the documented subsidy',
34030:'estimation procedures to gain an understanding of the process, including the types of underlying data used to develop cash flow',
34031:'assumptions, key formulas used in cash flow worksheets, and the person responsible for each phase of the process. b. identify',
34032:'significant external and internal factors that may affect the credit subsidy process. external factors may include economic conditions, current political',
34033:'climate, and relevant legislation. internal factors may include the size of the agencys budget and accounting staff, qualifications of key',
34034:'personnel, turnover of key personnel, and systems capabilities. c. develop a highlevel understanding of the agencys use of information technology,',
34035:'how information technology affects the subsidy estimate process, and which systems should be included with the general and application control',
34036:'review.1 the auditor should actively coordinate general and application control reviews of financial management systems to ensure that they focus',
34037:'on controls over key cash flow reports such as defaults or prepayments as well as the controls overthecashflowspreadsheets. further,theauditorshouldconsiderevaluatingcontrolsoverthe agencysuse',
34038:'ofthe omb credit subsidy calculator. for a detailed discussion of the audit procedures related to the omb credit subsidy calculator,',
34039:'refer to the report of independentaccountants and independent verification and validation y2k documents pertaining to the credit subsidy calculator, available',
34040:'on omb’s federal credit support page prepared by the budgetanalysis branch: http://www.omb.gov/credit. these audit procedures have been included in this',
34041:'technical release in summary form. page 6 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised',
34042:'d. determine, with the assistance of a systems audit specialist as necessary, whether systemsrelated controls are likely to be effective.2',
34043:'if controls are not likely to be effective, the auditor should determine the impact on control risk, appropriately adjust substantive',
34044:'testing, and focus on testing the effectiveness of manual controls during the internal control phase of the audit. 16. the',
34045:'auditor may gather planning information through different methods such as observing agency operations, interviewing agency staff, reviewing procedures manuals, and',
34046:'conducting walk throughs. in addition, the auditor may gather information from relevant reports, including prior year financial statements, federal managers',
34047:'financial integrityact fmfia reports and supporting documentation, inspector general and internal audit reports, and congressional hearings and reports. identifying key',
34048:'assumptions 17. onewayfortheauditortomaximizeauditefficiencyistofocusonthekeyassumptions,i.e., those assumptions that have the greatest impact on the credit subsidy rate and hence, the credit subsidy',
34049:'amount. to identify key assumptions, the auditor should evaluate and retest selected areas of managements credit subsidy sensitivity analysis. for',
34050:'example, in performing this analysis, agency management may have varied the subsidy estimate assumptions by a fixed amount, such as',
34051:'10 percent in either direction, and was thus able to identify the degree to which the subsidy rate was sensitive',
34052:'to different assumptions. these assumptions often require greater audit effort because minor variations may have material effects on the subsidy',
34053:'amount. the auditor should review this sensitivity analysis carefully and retest selected portions as necessary to gain comfort with managements',
34054:'work before relying on it. in resetting the agencys sensitivity analysis, the auditor should consider recalculating the impact that changes',
34055:'in key assumptions have on a credit programs subsidy amounts. 18. when identifying key assumptions, additional consideration should also be',
34056:'given to those assumptionsthatfluctuatesignificantly. theseassumptionsmaybemoredifficulttopredict, andtheir normal fluctuationmaymateriallyaffect thecredit subsidyamounteven though the credit subsidy amount may not change significantly during',
34057:'the sensitivity analysis. for example, prepayments may be difficult to predict since historically they fluctuated ten percent or more over',
34058:'the past five years. thus, even though the auditor did not identify prepayments as a key assumption during the review',
34059:'of the agencys sensitivity analysis, 2 although the actual testing of technical systemrelated controls should generally be performed by a',
34060:'systems audit specialist, the financial statement audit team should participate in identifying and testing general controls, user controls, and application',
34061:'controls to tentatively conclude on the effectiveness of systemsrelated controls. page 7 technical release 3 revised fasab handbook, version 20',
34062:'06/21 technical release 3 revised prepayments should be considered a key assumption because their normal fluctuation may materially affect the',
34063:'credit subsidy amount. 19. ifmanagementhasnotperformedsensitivityanalysisofthecreditsubsidyassumptions,the auditor may consider performing a sensitivity analysis or other analysis to identify the key cash',
34064:'flow assumptions. this analysis will allow the auditor to focus on key areas and will increase the auditors efficiency in',
34065:'the substantive testing phase of the audit. identifying material and high risk credit programs for internal control and substantive testing',
34066:'20. inorderfortheauditortomaximizeefficiencyandeffectivenesswhenselectingprogramsfor internal control testing and substantive testing, the auditor should focus efforts on material programs. generally, material programs have',
34067:'higher inherent risk than immaterial programs. materialityisdefinedin financialaccountingstandardsboardstatement of financial concepts no. 2, qualitative characteristics ofaccounting information, as the magnitude',
34068:'of an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the',
34069:'judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement.',
34070:'thus, items of little importance are less likely to affect the financial statement users’ judgment. materialityhas bothqualitative andquantitativefactors,since certain types',
34071:'of relatively immaterial misstatements from a quantitative standpoint could be significant for other reasons. for example, some programs that are',
34072:'immaterial in amount could be sensitive because of congressional interest. 21. accordingtostatementonauditingstandard47,ausection312,auditriskandmateriality in conducting anaudit, audit risk and materiality, among',
34073:'other matters, need to be consideredtogetherindeterminingthenature,timing,andextent ofauditingproceduresand in evaluating the results of those procedures. the following list includes some of',
34074:'the factors that the auditor should consider in determining which direct loan or loan guarantee programs are material and/or high',
34075:'risk and therefore should be selected for testing. the amount of subsidy expense for a given program, the dollar value',
34076:'of the programs direct loans on the balance sheet, the dollar value of the programs loan guarantees and their related',
34077:'liability for default, thedollaramountofsubsidyexpense,magnitudeoftransactions,andvarianceof past reestimates, past audit experience for the program, the auditors preliminary assessment of risk, recent significant',
34078:'changes in economic conditions, page 8 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised the',
34079:'complexity of the program the number, size, and technical difficulty of the loans, the age of the program new programs',
34080:'may have more risk than older established programs, other things being equal, the degree to which subrecipients, contractors, and private',
34081:'lenders make decisions about implementing the program, and congressional and other public policy interest in a given program. 22. this',
34082:'list is designed to assist the auditor in identifying material and/or highrisk programs. the above list is not designed to',
34083:'replace professional judgment. for example, a credit program could have a relatively small subsidy expense because the agency nets gross',
34084:'subsidy expense components with offsetting fees, in accordance with sffas no. 2 and the creditreformact. however, theauditor shouldnotfocus solely onthe',
34085:'net subsidy expense. rather, the auditor should consider the gross amounts of the subsidy expense andfees, thetotalloansreceivable,and/orthetotalliabilityforloanguaranteeaccount when determining whether',
34086:'the program is material. 23. past audit experience should be considered since it may indicate that the program should be',
34087:'retested again this year when, for example, significant internal control weaknesses were discoveredintheprioryearsaudit. conversely,pastauditexperiencemayallowtheauditor to reduce the level of current',
34088:'year testing for the program. factors that should be considered in determining the appropriate level of detailed substantive testing for',
34089:'material programs include: the number of years since the last time the program was included in internal control and substantive',
34090:'testing, the results of the preliminary assessment of risk, changes in economic events that affect the current cash flow assumptions,',
34091:'the level of employee turnover, and changes in program characteristics, terms of credit, or implementation. 24. finally,wheninherentriskislowandtheagencyscontrolenvironmentisstrong,theauditor may consider testing',
34092:'credit programs on a rotating basis. in determining whether rotational testing is appropriate, the auditor should consider 1 the results',
34093:'of prior audit experience, 2 the length of time since the program was tested, 3 the materiality of the program,',
34094:'and 4 the auditors assessment of inherent and control risk. 25. upon completion of the internal control testing, the auditor',
34095:'may wish to revise the assessment of which programs are material and/or high risk. for example, the auditors preliminary risk',
34096:'assessment may not be supported by the results of the internal control testing. when the results of the internal control',
34097:'testing lead the auditor to conclude that the internal control is not operating effectively, the auditor may revise the risk',
34098:'assessment for page 9 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised programsoriginallyexpectedtohavelowrisk. asaresult,theauditorshouldincludethese programs',
34099:'in the detailed substantive testing. on the other hand, the auditor may decide to reduce the extent of detailedsubstantivetesting fora',
34100:'materialprogrambasedon the results of internal control testing. assessing inherent risk and the effects of information technology 26. based on the',
34101:'auditors understanding of the credit subsidy estimation process, the auditor identifies specific inherent risks3 and control environment weaknesses. to identify',
34102:'inherent risk factors, the auditor generally focuses on 1 the nature of the agencys program, 2 prior history of audit',
34103:'adjustments, and 3 the nature of material transactions. the nature of an agencys program may increase inherent risk. for example,',
34104:'some loan guarantee programs may be more susceptible to errors because of loans issued and serviced by third parties. significant',
34105:'audit adjustments in previous audits often identify problem areas that may continue to result in financial statement misstatements. accounts involving',
34106:'subjective management judgments, such as credit subsidy estimates and the liability for loan guarantees, are usually higher risk than those',
34107:'involving objective determinations. 27. information technology can also introduce inherent risk factors. the auditor should assess systemsrelated factors and determine',
34108:'the overall impact of information technology on inherent risk. for example, unusual or nonroutine transactions generally increase inherent risk. programsorsystemsdevelopedtoestimatecreditsubsidyamounts,e.g.,theagencys',
34109:'cash flowspreadsheets, maynot be subjected tothe sameproceduresand controlsasedp programsandsystemsdevelopedtoprocessroutinetransactions. thedegreeofexistence and completeness of the audit trail may also increase inherent',
34110:'risk. the audit trail demonstrates how a specific transaction was initiated and processed. some edp financial management systems are designed',
34111:'so that the audit trail exists only for a limited period, only in electronic format, or only in summary form.',
34112:'uniform processing of transactions may also increase inherent risk because a programming error will consistently misstate transactions. for example, if',
34113:'an agency misstates a cash flow assumption, such as defaults, recoveries, or the interest rate, in a cash flow spreadsheet',
34114:'that has been electronically linked to other cash flow spreadsheets, the error will affect all of the linked cohorts or',
34115:'programs. as a result, the auditor must be aware that some errors may be systemic rather than isolated incidents and',
34116:'the auditor should be careful to distinguish between the two. 3 inherent risk is the susceptibility of a financial statement',
34117:'assertion to a material misstatement, assuming that there are no related internal controls. financial statement assertions are representations by management',
34118:'that are embodiedinfinancialstatement components. seecodificationofstatements onauditingstandards,ausection326. page 10 technical release 3 revised fasab handbook, version 20 06/21 technical release 3',
34119:'revised testing internal control 28. asnotedabove,theauditorshouldselectmaterialprogramsforinternalcontrolanddetailed substantive testing. in this way, the auditor will more effectively and efficiently focus audit',
34120:'efforts on the programs that are most significant to the users of the financial statements. in some instances, more than',
34121:'one program will utilize the same system of internal control. thus, the auditor would need only test the system once',
34122:'to gain assurance on all related programs. this section provides guidance for the auditor to use in evaluating the agencys',
34123:'internal control for material and/or highrisk credit programs so that the auditor can determine the nature, timing, and extent of',
34124:'substantive tests to perform on credit reform related accounts such as subsidy expense, allowance for subsidy, and liabilities for loan',
34125:'guarantees. theauditorneedstoevaluatetheagencysinternalcontrolbeforeupdatingthe preliminary assessment of the control risk.4 29. due to the complexity of credit reform, it is necessary for',
34126:'the auditor to obtain a good understanding of the internal control components to design effective substantive tests. if, after evaluating',
34127:'the agencys internal control, the auditor assesses control risk at a high level, the auditor will need to obtain most,',
34128:'if not all, of the audit assurance from substantive tests. thus, the auditor will need to expand the level of',
34129:'detailed substantive testing. however, if the auditor determines that control risk is low based on the evaluation of the agencys',
34130:'internal control, the auditor has more assurance concerning the accuracy of the information generated within that structure. thus, the auditor',
34131:'may be able to reduce the level of detailed substantive testing. 30. internalcontrolisaprocessaffectedbyanagencysmanagement5andotherpersonnelto provide reasonable assurance regarding the achievement of',
34132:'reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. internal control consists of the control',
34133:'environment, control activities, information and communication,riskassessment,andmonitoring. theauditorshouldconsiderthefollowing when obtaining an understanding of the agencys internal control. 4 control risk is',
34134:'the risk that a material misstatement could occur in a financial statement assertion and will not be prevented, detected, and',
34135:'corrected on a timely basis by the entitys internal control structure. 5 inthistechnicalrelease,theterm agency management isusedinthesame contextas itisusedinomb circulara123 and',
34136:'may include any individual federal manager responsible for ensuring that credit reform is implemented efficientlyandeffectivelytoachieveintendedprogramresults. agencymanagementcouldinclude,butisnotlimitedto, the chief financial officer,',
34137:'director of budget, and controller. page 11 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised',
34138:'assessing the control environment 31. the control environment sets the tone of an organization, influencing the control consciousnessofitspeople. itisthefoundationforallothercomponentsofinternalcontrol, providing',
34139:'the discipline and structure. when assessing the control environment, the auditor should consider managements philosophy and operating style done elsewhere',
34140:'in the audit and generally perform the following steps for the material programs systems of internal control. a. determine whether',
34141:'the same estimation process was used for other programs by comparing the documented procedures between programs. if the same process',
34142:'was used between programs, the resultsof the internal control testing for this program may help the auditor gain comfort with',
34143:'other programs. b. determine how management assures itself that established procedures and internal control have been consistently implemented among the',
34144:'various divisions/branches responsible for preparing subsidy expense estimates. c. determinehowmanagementassuresitselfthatthehistoricaldatausedasthebasisfor the subsidy amounts accurately supports the cash flow assumptions. d.',
34145:'determine whether the agency has the appropriate supporting documentation for key assumptions as outlined inappendixaof this technical release. e. determine',
34146:'how management assures itself that assumptions or data requirements which are based on conditions affecting multiple programs and cohorts are',
34147:'uniformly applied. forexample,identifyandtestthecontrolsinplacethatmanagementrelieson to ensure that: similar assumptions are made concerning economic conditions for a particular business sector where both',
34148:'direct and guaranteed credit programs are delivered, historical data for subsidy expense components are consistently collected and interpreted among similar',
34149:'programs, and optionschosenfortheombcreditsubsidycalculatorproperlyreflectthespecific characteristics of the applicable credit program. f. review managements comparison of projected cash flows to actual cash',
34150:'flows from the accounting department. determine whether management 1 appropriately identified material variances and the cause of these variances, 2',
34151:'performed trend analysis of the credit subsidy components, 3 adjusted future cash flow estimates of those cohortstoreflect these variances,4determinedwhethertherewasaflawinthe cash',
34152:'flow spreadsheet that caused the variance and, if so, determined the impact this flaw had on all cohorts, and 5',
34153:'reestimated subsequent years subsidy amounts, as appropriate. page 12 technical release 3 revised fasab handbook, version 20 06/21 technical release',
34154:'3 revised g. determine whether the agency is appropriately using the latest version of the omb credit subsidycalculator byrecalculatingthe subsidyrate',
34155:'withthe agency’sestimated cash flows.6 h. if applicable, determine whether waivers were obtained from omb for years in which subsidy reestimates',
34156:'were not performed in accordance with omb guidance. i. determine how management assures itself that the agency used the proper',
34157:'scale for the cash flow spreadsheets. some program subsidy rates, particularly those for programs disbursing over several years, may be',
34158:'influenced significantly by the scale for cash flow values. therefore, management should determine whether an appropriate scale has been used',
34159:'so that rounding to three decimal places has no significant effect on the cash flow spreadsheet values and the subsidy',
34160:'rate. j. determinehowmanagementassuresitselfthattheagencyhasappropriatelyprepared cash flows using a cohort basis or disbursement year basis. for example, when a program disburses over',
34161:'more than one year, the auditor should determine whether the agencyusedadisbursementyearbasis. iftheagencyusedacohortbasis,theauditor should determine why the agency did not use',
34162:'a disbursement year basis and whether the use of cohort level cash flows hashad a material effect on the subsidy',
34163:'calculation. if the effect is material, the auditor should recommend that the agency prepare cash flows on a disbursement year',
34164:'basis to eliminate the problem. k. determine whether agencies have controls over access to the omb credit subsidy calculator, e.g.,',
34165:'confirmation of passwords, and determine whether these controls adequately protect the model from unauthorized use and corruption. controlactivities 32. control',
34166:'activities are the policies and procedures designed to ensure that management directives are carried out. control activities have various objectives',
34167:'and are applied at various organizational and functional levels. control activities can include physical controls, segregation of duties, performance reviews,',
34168:'and information processing. when assessing managements assignment of responsibility and delegation of authority for ensuring the efficient and effective implementation',
34169:'of credit reform, the auditor should consider doing the following. a. assess managements control methods for monitoring and following up',
34170:'on the agencys ability to prepare reliable subsidy estimates by reviewing, on a test basis for material programs, managements comparison',
34171:'of projected net cash flows with actual cash flows to determine whether over time projected cash flows are becoming more',
34172:'representative of actual cash flows and whether reestimates are the result of 6acopy of the model is available from omb’s',
34173:'budgetanalysis branch. page 13 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised controllable factors technical',
34174:'cash flow assumptions or uncontrollable factors discount rate assumptions. b. verify that the cash flow assumptions that the agency used',
34175:'in developing its cash flow estimates were reviewed and approved by the appropriate agency management. c. determine how management assures',
34176:'itself of the reliability and logic flow in formulas and mathematical functions within agency initial cash flow worksheets. d. assesstheinternalcontrolusedbymanagementtoensurethatchangesmadetocash',
34177:'flowspreadsheetformulasareappropriate. forexample,ifchangesmadetoonecash flow spreadsheet need to be carried forwardto other spreadsheets, determine whether this is done automatically or if each',
34178:'spreadsheet must be updated individually. assess the risk of errors being introduced during this process. e. determine whether management has',
34179:'a systematic process in place to identify significant changes in economic or other assumptions that will affect subsidy rates of',
34180:'existing cohorts. determine whether management has a systematic process in place to calculate the differences between actual and estimated cash',
34181:'flows and the possible effect of these differences on the future cash flows of existing cohorts. determine whether this process',
34182:'assesses the materiality of these changes on the cash flow estimates and the subsidy expense and appropriately concludes whether reestimates',
34183:'are required under omb guidance. in evaluating potential changes in cash flow assumptions, the process should assess the impact that',
34184:'various factors may have on the program which also may affect subsidy rates, such as: legislative program changes, administrative program',
34185:'changes, environmental changes, operational changes, e.g., a reduction in employees because of budgetary constraints that would impact the servicing of',
34186:'loans, war, and international economic factors. f. determinehowmanagementassessestheimpactofchangesinlawsorregulationson the reliability of estimates. for example, a legislative program change may include',
34187:'provisions about maturity or type of borrowers that are outside the scope of past agency experience or may include program',
34188:'changes that shift the composition of new lending toward more or less risky borrowers. stratification of the portfolio by risk',
34189:'category may enable management to assess the effect of the changes on the estimates. if the agencys databases do not',
34190:'permit such stratification, the uncertainty associated with the estimates may increase. g. determine whether management has a systematic process in',
34191:'place to estimate the effect of the factors considered in paragraph e above on the cash flows of new cohorts.',
34192:'page 14 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised 33. once specific controls related',
34193:'to the above activities have been identified, additional tests should be designed to ensure that the agencys controls are operating',
34194:'as designed. the auditor should consider using dual purpose testing to combine the internal control testing with substantive testing as',
34195:'appropriate. dual purpose testing is discussed in more detail in the section on substantive testing of subsidy estimates in this',
34196:'technical release. information and communication 34. thequalityofsystemgeneratedinformationaffectsmanagementsabilitytopreparereliable financial reports. communication involves providing an understanding of individual roles andresponsibilitiespertainingtointernalcontroloverfinancialreporting. theauditorshould obtain',
34197:'an understanding of 1 the classes of transactions in the agencys operations that are significant tocredit reformaccounting inaccordancewithtreasurycasestudies,2how those transactions',
34198:'are initiated, 3 the accounting records, supporting information, and specific accounts in the financial statements involved in the processing and',
34199:'reporting of the transactions, 4 the accounting process involved from the initiation of a transaction to its inclusion in the',
34200:'financial statements, and 5 the financial reporting process used to prepare the agencys financial statements, including significant accounting estimates and',
34201:'disclosures. when assessing controls over information and communication, the auditor should consider doing the following: a. identify and test the',
34202:'controls in place designed to ensure that appropriate personnel are made aware of any concerns that result from reviewing key',
34203:'cash flow assumptions and comparing estimated to actual cash flows as well as the actions taken to resolve the concerns',
34204:'and update the subsidy estimate as appropriate. b. determine whether internal control are in place to ensure that the data',
34205:'supporting the cash flow identifiers7 used in the spreadsheets are appropriate and consistent with the description of the identifier contained',
34206:'in the applicable users guide of the omb credit subsidy calculator. effective internal control are needed to ensure that disclosures',
34207:'concerning the amount of subsidy expense related to interest differential direct loans, interest supplement loan guarantees, defaults net of recoveries,',
34208:'fees, and other are reasonable. for example, the auditor should identify and test controls designed to ensure that the amount',
34209:'estimated for recoveries is based on reliable, complete information from the agencys past experience. for example, the auditor should also',
34210:'identifyand test controlsdesigned to ensurethat, whencompiling the information upon which the estimate is made, transactions have been properly classified as',
34211:'a recovery 7 cash flow identifiers are listed inthedocument, “how toorganize cashflow estimatesina spreadsheet file,” whichis available on the federal',
34212:'credit support page http://www.omb.gov/credit. the document includes various elements the agency must consider when estimating net cash flows, such as',
34213:'disbursements, principal payments, interest payments, fees and other income, defaults, etc. page 15 technical release 3 revised fasab handbook, version',
34214:'20 06/21 technical release 3 revised rather than a reduction in the amount of another cash identifier such as defaults',
34215:'or losses other than default. c. determine whether controls are in place to ensure that all applicable credit program cash',
34216:'flows are addressed in the subsidy estimation process. for example, cash flows should be estimated for all transaction types that',
34217:'affect standard general ledger account nos. 1399,allowance for subsidy, and 2180, loan guarantee liability. conversely, transactions in unrelated accounts should',
34218:'be excluded from the subsidy calculation. to test these controls, the auditor should consider reviewing the cash flow worksheet input',
34219:'and the program description to determine whether all applicable cash flow types have been included. in addition, the auditor should',
34220:'review the transaction types included in theallowance for subsidy and the liabilities for loan guarantees accounts on a test basis',
34221:'to determine whether these transactions are appropriate. risk assessment 35. the risk assessment process is an internal process used by',
34222:'the agency to 1 identify and analyze the relevant risks to achieving its objectives and 2 develop a plan to',
34223:'mitigate the identified risk. the auditor should obtain sufficient knowledge of the agencys risk assessment process to understand how management',
34224:'identifies, evaluates, and mitigates risks relevant to developing reliable credit subsidy estimates. in evaluating the risk assessment process, the auditor',
34225:'should determine if management developed a strategic plan with goals and objectives for ultimately improving the reliability of estimates. the',
34226:'auditor should determine whether this plan addresses 1 clearly defining the data requirements, 2 developing an effective information store and',
34227:'modeling methods as described in issue paper 96cr7 model credit program methods and documentation for estimating subsidy rates and the',
34228:'model information store, available from theaapc web page http://fasab.gov/aapc/cdreform/othercrddoc.htm, 3 improving the methods of estimating cash flows, and 4 stepbystep',
34229:'resource allocations and target completion datestomeetthegoalsandobjectivesofthestrategicplan. alsotheauditor shouldassess managements progress at meeting the plans goals and the targeted completion dates.',
34230:'monitoring 36. management should monitor controls to determine whether they are operating as intended andthattheyaremodifiedasappropriateforchangesinconditions. monitoringisaprocess that assessesthequality ofinternal controlperformanceover',
34231:'time. ombcirculara123, managementaccountability and control, is issued under the authority of the federal managers financial integrityact fmfia of 1982 and',
34232:'provides guidance to federal managers on improving the accountability and effectiveness of federal programs and operations by establishing, assessing, correcting,',
34233:'and reporting on management controls. during federal financial statement audits, the auditor is required to assess the agencys compliance with',
34234:'the fmfia. the auditor should obtain sufficient knowledge of the major page 16 technical release 3 revised fasab handbook, version',
34235:'20 06/21 technical release 3 revised types of activities the entity uses to monitor internal control over financial reporting, including',
34236:'how those activities are used to initiate corrective actions. when assessing control risk, the auditor should be cognizant of any',
34237:'material weaknesses reported in the agencys fmfiareport that relate to the efficient and effective implementation of credit reform. substantive testing',
34238:'of subsidy estimates 37. agencies are required by sffas no. 2 to account for subsidies at the cohort level in',
34239:'their accounting systems. this information is then aggregated for inclusion in the financial statements. as previously noted, footnote information related',
34240:'to credit programs is typically reported at the fund or program level and the total subsidy expense for the year',
34241:'is divided among three categories: the current years direct loans or loan guarantees, modifications, and reestimates. the subsidy expense for',
34242:'the current years direct loans or loan guarantees is segregated into four categories consisting of interest differential or supplement, defaults,',
34243:'fees, and other. the auditor needs to gain assurance about these cost categoriesattheaggregated fund/programlevel; however,itisdifficult for the auditor to apply',
34244:'adequate procedures for summary amounts which represent numerous cohorts. it would be difficult to explain variations in aggregated amounts without',
34245:'addressing the more detailed cohort level. determination of what level to disaggregate subsidy information for the purposes of an audit',
34246:'will vary for each agency and will be contingent on current practice and available information. generalapproach to substantive testing 38.',
34247:'the following four steps provide a general approach for performing substantive testing. detailed guidance on implementing these four general steps',
34248:'follows. the nature, timing, andextent of substantivetestswillbe significantlyinfluenced bytheauditorsassessmentof the internal control environment. this section is written under the premise',
34249:'that the agency has established effective internal control. the next section includes a discussion of the impact of ineffective controls',
34250:'on the nature, timing, and extent of substantive testing as well as the impact on the audit opinion. a. select',
34251:'a representative sample of cohorts for detailed testing, for those material programs selected for internal control testing.8 8 professional standards',
34252:'stated inau section 350.24 that sample items should be selected in such a way that the sample can be expected',
34253:'to be representative of the population. therefore, all items in the population should have an opportunity to be selected. page',
34254:'17 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised b. test sampled cohort estimates to',
34255:'determine whether the credit reform process is working as defined and whether the account balance is reasonably stated. c. perform',
34256:'analytical review procedures to gain assurance that the estimates are reasonable for lines of business, funds, programs, or cohorts not',
34257:'selected for detail testing. d. conclude on audit differences identified during the test work and determine the financial statement impact.',
34258:'impact of ineffective internal control on substantive testing 39. the auditors assessment and conclusions regarding the effectiveness of the agencys',
34259:'internal control structure, including computer security and the effectiveness of edits and other system controls, will significantly impact the level',
34260:'of substantive testing. if the agencys internal control structure is not effective i.e., does not adequately reduce the risk that',
34261:'a material misstatement related to credit reform in the financial statements would be detected and corrected, the auditor will need',
34262:'to design substantive tests to gain assurance on the account balance and propose audit adjustments as necessary. 40. for example,',
34263:'if there is no system in place to trigger reestimates, the auditor will need to review managements comparison of actual',
34264:'cash flows for material programs to projected cash flows to search for and identify material variances. in addition, the auditor',
34265:'will need to determine whether the agency identified other factors that may materially affect future cash flows, e.g., economic downturn,',
34266:'program changes, or drought, and may require a reestimate. ifthebudgetedtoactualcashflowcomparisonwasnotdonebytheagency,the auditor should consider performing this analysis based on resource availability.',
34267:'based on the auditors analysis of the identified variances and other changes that may affect future cash flows, the auditor',
34268:'should determine whether a reestimate is necessary and urge the agencytocalculatethereestimate. oncethereestimateismade,theauditoristhenableto assess the impact of the reestimate on the',
34269:'financial statements. 41. if in the auditors opinion 1 the internal control weaknesses are so significant that the subsidy expense',
34270:'is likely to be materially misstated, 2 resource constraints make it unreasonable for the auditor to conduct the level of',
34271:'substantive testing necessary to determine the possible audit adjustments, or 3 resource constraints at the agency make it unreasonable to',
34272:'calculate all the necessary material reestimates and include them in the financial statements, the auditor would likely be required to',
34273:'modify the audit opinion. for example, the monitoring process to determine whether reestimates are necessary is a key internal control.',
34274:'without effective monitoring, the agency may not have reasonable assurance that material reestimates will be made timely and the auditor',
34275:'would need to expand the level of substantive testing. when an agency does not 1 reestimate credit subsidies for the',
34276:'most recently completed fiscal year and include the reestimate in the current years financial statements or 2 provide assurance that',
34277:'there is no material page 18 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised financial',
34278:'statement impact as specified in tr 6 paragraphs 47 – 58, the auditor should consider modifying the audit opinion. 42.',
34279:'when assessing the financial statement impact of subsequent events related to credit subsidies, the auditor should follow the guidance inau',
34280:'section 342.13 for events occurring after the reestimate date but before the end of fieldwork. in addition, auditors should considerausections',
34281:'508.19and .29 .32 whenassessingthe effectofuncertainties on the agencys financial statements and the auditors opinion. selecting the sample of cohorts 43.',
34282:'theproceduresforselectingasampleofcohortsdependuponthetypeofinformationtobe gleaned from the sample and the desired precision of sample estimates. the sampled cohort is tested to determine whether',
34283:'the credit reform process is working as defined and morespecifically, whether the related balance sheet and statement of net cost',
34284:'lineitemsare reasonably stated. in order to gain audit efficiencies, the auditor should consider utilizing dual purpose testing9for a representative sample',
34285:'of cohorts selected from material credit programs. inthisway,theauditorwillbeabletogainassurancefromthesamesamplethat both the internal control structure is effective and that the account balance',
34286:'is reasonably stated in relation to the financial statements taken as a whole. when more than one program utilizes the',
34287:'same system of internal control, the auditor should onlytest the system once to gain assurance on all related programs and',
34288:'their cohorts. to utilize representative sampling, the auditor must select sample items in such a way that each item in',
34289:'the population has an opportunity to be selected and the estimators are appropriate for the selection methods. in this way,',
34290:'the sample and the resulting estimate or projection are expected to be representative of the population from which the sample',
34291:'was selected. in addition, sufficient sample sizes are necessary in order for the auditor to arrive at meaningful conclusions. 44.',
34292:'the auditor may wish to stratify the population of cohorts into homogeneous groups prior to selecting the sample to improve',
34293:'sampling efficiency. for example, the auditor may stratify the cohort population into the following three significant groups: 1 material cohorts',
34294:'of such a magnitude that the auditor will test them all, 2 material cohorts that the auditor will sample for',
34295:'testing, and 3 immaterial cohorts that will be subjected to analytical review procedures. for some agencies, the small number of',
34296:'cohorts may prohibit using this sampling approach. in these instances, the auditor should focus on selecting a representative sample in',
34297:'a nonstatistical manner, i.e., using auditors judgment to select 9dualpurposetestingoftenimprovesaudit efficiency by performing multiple audit procedureson a single sample, e.g.,',
34298:'internal control attribute and substantive testing. page 19 technical release 3 revised fasab handbook, version 20 06/21 technical release 3',
34299:'revised material cohorts for testing to obtain sufficient coverage of the balance being audited or doing a 100 percent sample.',
34300:'45. alternatively, when the agencys control environment is strong and inherent risk is low, the auditor may test cohorts on',
34301:'a rotating basis. in determining whether rotational testing is appropriate, the auditor should consider 1 the results of prior audit',
34302:'experience, 2 the length of time since the cohort was tested, 3 the materiality of the cohort in terms of',
34303:'the relative effect of the cohort on total program expenditures or the size of the program in absolute dollars, and',
34304:'4 the auditors assessment of inherent and control risk. the auditor may wish to score these factors in determining the',
34305:'cohorts relative risk. based on the cohorts score, the auditor may establish a rotation matrix for substantive testing. for example,',
34306:'all cohorts above a predetermined score would be considered high risk and selected for substantive testing while other cohorts below',
34307:'this score could be tested on a rotating basis. testing sampled cohorts 46. professionalstandardscallfortheauditorto analyzehistoricaldatausedindevelopingthe assumptions to assess whether the',
34308:'data are comparable and consistent with data of the period under audit, and consider whether such data are sufficiently reliable',
34309:'for the purpose.10 in the planning phase, the auditor identified the key assumptions as those whose variation had the greatest',
34310:'impact on the subsidy rate or which varied significantly. based on this work, and the results of the internal control',
34311:'analyses, the auditor should be able to focus on the key assumptions. however, these key assumptions may be tested in',
34312:'conjunction with the audit of other financial statement line items. for example, the default rate assumption for guaranteed loans can',
34313:'be tested as part of the audit of claim payments, recoveryrate assumptionscanbe testedduringtheauditofforeclosedproperty,feescanbe audited in conjunction withinsurance premiumorothercashreceipts, and prepaymentscan',
34314:'be audited during the audit of insurance in force. in these cases, the auditor must carefully plan the audit samples',
34315:'for these areas in order to include information that will be applicable to the credit subsidy audit and gather sufficient',
34316:'evidence for the auditor to determine the reasonableness of the credit subsidy. for example, when auditing credit subsidy default, prepayment,',
34317:'and recovery assumptions, it is important to determine for which cohort the claim payment was made. 47. thefollowingareexamplesofthetypesofteststheauditorcanperformonarepresentative sample of',
34318:'cohorts selected for dual purpose testing: 10 codificationofstatementsonauditingstandards,ausection342,auditingaccountingestimates. page 20 technical release 3 revised fasab handbook, version 20 06/21 technical',
34319:'release 3 revised a. collect projected cash flow worksheets used for budget execution and the most recent reestimates for each',
34320:'cohort selected for testing to determine whether the program assumptions are utilized at the cohort level. trace and compare key',
34321:'cash flow assumptions to the agencys supporting data, including reports on defaults, prepayments, recoveries, etc. b. verifythereliabilityofthedatausedindevelopingtheassumptionsandensurethatkey assumptions are sufficiently',
34322:'reliable by comparing the reports to similar reports tested in related audit areas to assess consistency and tracing summary reports',
34323:'to historical supporting documentation, on a test basis, to determine whether the reports are complete and accurate. c. determine whether',
34324:'management used reasonable and systematic methods to project key cash flow assumptions by reviewing, assessing, and recalculating, on a test',
34325:'basis, key portions of the cash flow worksheets. d. based on the results of systemrelated control tests, the auditor should',
34326:'consider obtaining an appropriate, unmodified version of the omb credit subsidy calculator, downloading the agencyscash flowsintothisversion, and comparing the output',
34327:'to the agencys subsidy calculation. in performing these procedures, it is important for the auditor to use the same cash',
34328:'flows as those used to calculate the subsidy rate. thus, the auditor should verify that the file name, range name,',
34329:'and the date and time the spreadsheet was last changed matches the information on the model output. if differences are',
34330:'identified through this comparison, the auditor should consider recalculating the subsidy rate using the agencys data and an appropriate copy',
34331:'of the model.11 differences between the auditors recalculated rate and the agencys rate should be investigated and explained. e. the',
34332:'auditor should review the omb credit subsidy calculator output to determine whether any warning messages are listed and, if so,',
34333:'to determine why the situation causing the warning message was not resolved and whether not eliminating the error could have',
34334:'any impact on the subsidy rate calculation. also, if applicable, auditors should determine whether the suppression of any error messages',
34335:'was appropriate by checking the agencys cash flow spreadsheet to determine whether the suppress warnings command was used and assess',
34336:'the impact these suppressed error messages could have on the subsidy rate. f. the auditor should determine whether the omb',
34337:'credit subsidy calculator options that were selected properlyreflect specificcharacteristics of the applicable credit program. for example, the omb credit subsidy',
34338:'calculator options for the timing of principal and interest payments for direct loan programs and the timing of commitments and',
34339:'11 acopyofthemodelisavailableonomb’sfederalcreditsupportpagehttp://www.omb.gov/creditorfromomb’s budgetanalysis branch. page 21 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised disbursements',
34340:'by the private lender of a loan guaranteed should agree with the programs credit terms. g. verify that reestimates were',
34341:'performed under the conditions specified in technical release 6. determine whether reestimates were performed in addition to those required in',
34342:'technical release 6. for example, reestimates required for budgetary purposes may not be material to the financial statements. h. determinethatthesereestimateswerecompleted,includedinthefinancialstatements,',
34343:'and submitted to omb. i. determine whether the reestimation process included adjustments to subsequent years estimates of cash flows for',
34344:'this cohort. j. determine why reestimates werenotcalculated12andincludedin thefinancial statements, if applicable. when reestimates are not prepared for the most recently',
34345:'completed fiscal year, the agency must document the reason for forgoing the reestimate otherwise required in circulara11 and sffas no.',
34346:'2 and provide the necessary supporting documentation to omb and the auditor. the documentation should address the requirements prescribed in',
34347:'technical release 6. k. trace interest rates to approved omb rates to ensure that interest expense and income are calculated',
34348:'in accordance with omb circulara11. l. determine if the reestimates recorded in the accounting records were submitted to omb. m.',
34349:'determine whether modifications occurred as defined in sffas no. 2 and omb circularsa11 and whether the modification cost was estimated.',
34350:'n. verifywhetherthecashflowsanddiscountratesusedtocalculatethepremodification and postmodification values of the direct loans or values of the loan guarantee liability were determined appropriately. o.',
34351:'verifywhetherthemodificationcostwassubmittedtoomb,recordedintheaccounting records, and included in the financial statements. analytical review procedures 48. analytical review procedures can be performed on lines',
34352:'of business, funds, programs, or cohorts not selected for detailed testing. generally, these procedures consist of comparing recorded balances of',
34353:'subsidy expense, fund balance with treasury, debt owed to treasury, credit program receivables and related foreclosed property, and the liabilities',
34354:'for loan guarantees, with the auditors expectations. the basic premise of analytical review 12 omb hasestablished afourstepprocess, outlinedincirculara11,for agenciesto calculatetechnical',
34355:'reestimates for the budget less often than every fiscal year—subject to omb approval. however, this guidance does not allow agencies',
34356:'to omit material technical reestimates from the current year financial statements or to postpone including material technical reestimates in the',
34357:'financial statements until a subsequent year. conversely, the omb process may require agencies to make technical reestimates for the budget',
34358:'that are not material to the financial statements. page 22 technical release 3 revised fasab handbook, version 20 06/21 technical',
34359:'release 3 revised procedures is that plausible relationships among data may be expected to continue unless conditions are known that',
34360:'would change the relationship. based on the results of the analytical review procedures outlined below, some programs may be selected',
34361:'for detail substantive testing. in applying analytical review procedures, the auditor should consider the following procedures. a. based on the',
34362:'information gathered during the internal control phase of the audit, including the auditors understanding of the estimation process and economic',
34363:'events affecting the period under review, develop an expectation or estimate of what the recorded amount should be. for example,',
34364:'the auditor could compute an estimate of the subsidy expense by using averages as an overall test of reasonableness, i.e.,',
34365:'average loans outstanding, average interest rate, average default rate, and average fees. compare the results of the auditors estimate to',
34366:'the actual recorded balance to identifysignificantdifferencesthatrequireinvestigation. whenmakingestimatesofan account balance, the auditor should assess the reliability of the data used and',
34367:'the impact faulty data could have on the auditors expectation of the subsidy amount. b. compare the subsidy amounts for',
34368:'lines of business, funds, programs, or cohorts not selected for sampling for three or more years to identify trends and',
34369:'significant fluctuations in the subsidy rates. c. obtain explanations for these fluctuations from management to determine whether the fluctuationsarereasonable. scan13',
34370:'cashflowworksheets/reportstosearchforunusual items and investigate significant fluctuations. d. corroborate managements explanations as necessary. corroboration generally consists of reviewing related supporting documentation',
34371:'or obtaining explanations from accounting or budget personnel or from the appropriate program department. these explanations should be quantified and',
34372:'address the direction and magnitude of the event causing the fluctuation. e. if the explanation and/or corroborating evidence do not',
34373:'adequately explain the fluctuation, the auditor should consider increasing the precision in the auditors expectations, increasing the extent of detailed',
34374:'testing for the cohorts discussed above and not relying on the analytical procedures, or treating the difference as a misstatement.',
34375:'f. review and recalculate selected portions of the agencys trend analysis of the credit subsidy expense components to determine whether',
34376:'the agency identified and explained unusual or significant fluctuations in interest, defaults, fees, and other. if the agency has not',
34377:'done the credit subsidy component trend analysis, the auditor should 13 although scanning is not usually considered an analytical procedure',
34378:'on its own, this technique could be used to investigate unusual fluctuations in subsidy amounts or corroborate managements explanation of',
34379:'variances between projected cash flows and actual cash flows. page 23 technical release 3 revised fasab handbook, version 20 06/21',
34380:'technical release 3 revised consider performing this analysis. once unusual or significant fluctuations have been identified, the auditor should obtain',
34381:'and corroborate managements explanation. compliance with laws and regulations 49. by using the audit approach described in this technical release,',
34382:'the auditor will test compliancewiththefederalcreditreformactof1990, as amended. thus,no separate audit procedures are necessary to test compliance with this act. concluding',
34383:'on the reasonableness of estimates 50. statementonauditingstandardno. 57auditingaccountingestimates,au342, statesthat the auditor evaluates the reasonableness of accounting estimates in relationship to',
34384:'the financial statements taken as a whole. it goes on to state: “since no one accounting estimate can be considered',
34385:'accurate with certainty, the auditor recognizes that a difference between an estimated amount best supported by the audit evidence and',
34386:'the estimated amount included in the financial statements may be reasonable, and such difference would not be considered to be',
34387:'a likely misstatement. however, if the auditor believes the estimated amount included in the financial statements is unreasonable, he should',
34388:'treat the difference between that estimate and the closest reasonable estimate as a likely misstatement and aggregate it with other',
34389:'likely misstatements. the auditor should also consider whether the difference between estimates best supported by the audit evidence and the',
34390:'estimates included in the financial statement, which are individually reasonable, indicate a possible bias on the part of the entitys',
34391:'management. for example, if each accounting estimate included in the financial statements was individually reasonable, but the effect of the',
34392:'difference between each estimate best supported by the audit evidence was to increase income, the auditor should reconsider the estimates',
34393:'taken as a whole.” 51. uncertainties, among other qualitative aspects of information in financial reports, are discussed in statement of',
34394:'federal financialaccounting concepts sffac no. 1, objectives of federal financial reporting. according to sffac no. 1, reliability [of financial information]',
34395:'does not imply precision or certainty, but reliability is affected by the degree of estimation in the measurement process and',
34396:'by uncertainties inherent in what is being measured. thus, an amount reported in the financial statements may be fairly stated,',
34397:'but still imprecise. in addition, sffac no. 1 states that financial reporting may need to include narrative explanations about underlying',
34398:'assumptions and uncertainties inherent in this process. under certain circumstances, a properly explained estimate provides more meaningful information than no',
34399:'estimate at all. in other words, imprecision of accounting estimates can be overcome, to some extent, by appropriate financial statement',
34400:'disclosures. in determining whether 1 the credit program receivables and related foreclosed property and the liabilities for loan guarantees line',
34401:'items on the balance sheet, 2 the subsidy expense included in the statement of net costs, and 3 related footnote',
34402:'disclosures regarding credit reform are reasonably stated, the auditor must evaluate and carefully consider all of the audit evidence gathered,',
34403:'including the results of page 24 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised the',
34404:'internal control testing, system reviews, detailed substantive testing, analytical review procedures, as well as the above authoritative guidance. the provisions',
34405:'of this technical release need not be applied to immaterial items. page 25 technical release 3 revised fasab handbook, version',
34406:'20 06/21 technical release 3 revised appendixa:acceptable sources of documentation for subsidy estimates and reestimates 52. documentation must be provided',
34407:'to support the assumptions used by the agency in the subsidy calculations. this documentation will not only facilitate the agencys',
34408:'review of the assumptions,akeyinternalcontrol,itwillalsofacilitatetheauditorsreview. documentation should be complete and stand on its own, i.e., an independent person could perform the',
34409:'samestepsandreplicatethesameresultswithlittleornooutsideexplanationorassistance. if the documentation were from a source that would normally be destroyed, then copies should be maintained in the',
34410:'file for the purposes of reconstructing the estimate. 53. management should ensure that the following documentation is available for initial',
34411:'subsidy estimates, reestimates, and modifications of existing credit programs: 1. procedures for calculating the subsidy estimate, 2. review and approval',
34412:'process of the subsidy estimate, including the signoff procedure within the agency, 3. calculation of the recorded subsidy estimates, including',
34413:'the underlying assumptions and cash flow model, 4. historical supporting documents used in the underlying assumptions, 5. documentation of relevant',
34414:'supporting actual cash and economic experience including the date and source of reports, and how recently the data were updated,',
34415:'which may include: cash reports on historical performance, historical data and trends, citing sources of information and relevant time frame,',
34416:'sensitivity analysis or other analysis that identifies the most critical factors, reports from the accounting or management systems showing trends',
34417:'actuarial studies, experience of other agencies with similar programs, emergencies acts of god or legislated changes acts of congress, such',
34418:'as changes in the program terms, maximum allowable loan amount, total program size, or characteristics of the credit programs borrower',
34419:'population, and economic and/or industry data and subsequent analyses, including industry studies, journal articles, trade papers, and third party studies.14',
34420:'6. documentation of relevant program design factors, which may include: programdefinitionincludingfees,graceperiod,termtomaturity,borrowerinterest rates, legal definitions, and enabling or enacted legislation, 14for',
34421:'example, past data may document the historical relationship between interest rates, whereas an independent study may demonstrate how trends in',
34422:'past data are expected to change in the future. page 26 technical release 3 revised fasab handbook, version 20 06/21',
34423:'technical release 3 revised legislation or regulations changing the terms, maximum allowable loan amount, total program size, or characteristics of',
34424:'the credit programs borrower population, program eligibility requirements, lender agreements detailing the terms of the guarantee, and borrower contracts outlining',
34425:'the terms and conditions of the loan or guarantee. 54. management should ensure that the following documentation is available for',
34426:'new programs or changes to existing programs that may not have historical supporting documentation for cash flow assumptions and spreadsheets.',
34427:'in the absence of valid and relevant historical experience as the support for cash flow assumptions, the agency should document',
34428:'the basis for cash flow assumptions. typical support will include: relevant experiences from other agencies, including documentation of why another',
34429:'agencys experience is relevant, as well as similarities and differences particularly possible biases between the other agencys experience and the',
34430:'changes to existing programs or new programs, extrapolation from subsets of prior program activity, e.g., while prior loans were not',
34431:'targeted for single heads of households, it may be possible to identify prior loans that were made to single heads',
34432:'of households and the experience of such loans in prior records. assumptions used by underwriters for the purposes of determining',
34433:'eligibility, loan approval, or credit scoring. privatesectorproxiesforrisk,suchasbondratingstoassessdefaultrisk,maybe usedwhenthereisnorelevantfederalgovernmentexperience. forexample,an agency may consider using bond ratings for a state agency that',
34434:'finances similar loan programs, such as education, farm, or housing, with bonds. extrapolations from private sector lending experience including documentation',
34435:'explaining why this experience is applicable to the agencys credit program and possible biases for which an adjustment is needed,',
34436:'e.g., different borrower characteristics. expert opinion may also be used as an interim measure to support cash flow assumptions. in',
34437:'these cases, the agency must document the expert’s qualifications, such as professional or academic certification or length of experience, as',
34438:'well as the basis of the stated opinion. in addition, the following documents should be maintained in support of the',
34439:'experts opinion:  memos from conversations with outside experts,  reports and studies on similar industry conditions,  minutes from',
34440:'internal meetings describing the basis for any assumptions or changes in assumptions, and  previous studies conducted by the expert,',
34441:'including industry studies, journal articles, and third party studies. page 27 technical release 3 revised fasab handbook, version 20 06/21',
34442:'technical release 3 revised appendix b: technical glossary allowance for subsidy see direct loan subsidyallowanceaccount definition. assumptions basic beliefs about',
34443:'the future operating and functional characteristics of the loan or group of loans or loan guarantees. types of assumptions include:',
34444:'cash flow assumptions all known and/or forecasted information about the characteristics and performanceofaloanor groupofloansorloanguarantees. examplesincludeestimatesof loan maturity, borrower interest rate,',
34445:'default/delinquency rate, timing of defaults, overall impact of changes in economic factors, etc. model assumptions determinationsofhow cashflowassumptionsareapplied throughthe life of',
34446:'the cohort. for example, determining whether the entire assumed amount of defaults should be applied in 1 year or whether',
34447:'a constant or variable proportion of the assumption value should be allocated to each year. the allocation of cash flows',
34448:'over time is the selected model form and is just as influential as the cash flow assumptions. case level each',
34449:'individual loan or guarantee within a cohort. cash flow stream the agencys projection of the dollar amount for the scheduled',
34450:'cash flows and deviations from scheduled cash flow items for each year over the life of the cohort. page 28',
34451:'technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised cash flows estimatesof paymentsto orfrom the government',
34452:'over the life of a loan or group of loansor loan guarantees. for direct loans, these may include: loan disbursements,',
34453:'repayments of principal, payments of interest, and any other payments such as prepayments, fees, penalties, and other recoveries. for loan',
34454:'guarantees, these may include: payments by the government to cover defaults and delinquencies, interest subsidies, payments to the government, such',
34455:'as origination and other fees, penalties and recoveries, and any other payments. cohort all direct loans or loan guarantees of',
34456:'a program for which a subsidy appropriation is provided for a given fiscal year, even if disbursements occur in subsequent',
34457:'years. for direct loans and loan guarantees for which a subsidy appropriation is provided for one fiscal year, the cohort',
34458:'will be defined by that fiscal year. for direct loans and loan guarantees for which multiyear or noyear appropriations are',
34459:'provided, the cohort will be defined by the year of obligation. direct loan subsidy allowanceaccount the balance maintained in the',
34460:'general ledger that represents the difference between the current outstanding loans receivable balance and the present value of estimated cash',
34461:'outflows minus the present value of the estimated cash inflows over the remaining life of the direct loans. the subsidy',
34462:'allowance is subtracted from the loans receivable balance when calculating the net loans receivablebalance. asimilar account mayalsobeusedfor defaultedguaranteedloans. econometrics the',
34463:'application of statistical methods to the estimation of economic relationships. financingaccount the nonbudgetary account or accounts associated with each credit',
34464:'program account that holds balances, receives the subsidy cost payment from the credit program account, and includes all other cash',
34465:'flows to and from the government resulting from post1991 direct loans or loan guarantees. each program account is associated with',
34466:'one or more financing accounts, page 29 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised',
34467:'depending on whether the account makes both direct loans and loan guarantees separate financing accounts are required for direct loans',
34468:'and loan guarantees. fund an aggregation of programs into a common grouping consistent with how the congress provides appropriations i.e.,',
34469:'the program and financing accounts together and, if needed, the negative subsidy receipt accounts. this term has other meanings in',
34470:'different contexts. inputs in the context of federal credit, cash flow data elements used to develop spreadsheet calculations. internal control',
34471:'an integral component of an organization’s management that provides reasonable assurance regarding the achievement of reliable financial reporting, effective and',
34472:'efficient operations, and compliance with applicable laws and regulations. internal control consists of the control environment,riskassessment,controlactivities, informationandcommunicationand monitoring. key assumptions',
34473:'assumptions that have been established, through sensitivity analysis or other means, to be the elements that have a large impact',
34474:'on estimates, and thus are the most important factors in determining the cost of a loan or group of loans',
34475:'or loan guarantees. liability for loan guarantees account the balance maintained in the generalledger that representsthe present value of estimated',
34476:'cash outflows minus the present value of the estimated cash inflows over the remaining life of the outstanding loan guarantees.',
34477:'page 30 technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised liquidating account the budget account',
34478:'that includes all cash flows to and from the government resulting from pre1992 direct loans or loan guarantees, unless they',
34479:'have been modified and transferred to a financing account. negative subsidy receipt account the budget account for the receipt of',
34480:'amounts paid from the financing account when there is a negative subsidy cost for the original estimate or a downward',
34481:'reestimate. for mandatory programs, negative subsidiesanddownwardreestimatesmaybecrediteddirectlytothe program account as offsetting collections from nonfederal sources. omb credit subsidy calculator computer software',
34482:'developed by omb for discounting cash flows in estimating credit subsidies. it uses agency cash flow inputs to compute the',
34483:'net present value at the point of disbursement and the subsidy rate associated with those cash flows. program in the',
34484:'context of federal credit, an aggregation of cohorts which are linked by common terms, conditions, regulations, and/or mission goals; often',
34485:'a subdivision of a fund or the budgetary financing account. programaccount the budget account into which an appropriation to cover',
34486:'the subsidy cost of a direct loan or loan guarantee program is made and from which such cost is disbursed',
34487:'to the financing account. program accounts usually receive a separate appropriation for administrative expenses. risk category subdivisions of a cohort',
34488:'of direct loans or loan guarantees into groups of loans that are relatively homogeneous in cost, given the facts known',
34489:'at the time of obligation or commitment. risk page 31 technical release 3 revised fasab handbook, version 20 06/21 technical',
34490:'release 3 revised categories will group all loans obligated or committed for a program during the fiscal year that share',
34491:'characteristics predictive of defaults or other costs. all cohort level guidance in this technical release also applies to risk categories',
34492:'when they are used. service or line of business an aggregation of funds into a common grouping: for example, grouping',
34493:'funds into single family or multifamily designations. the following example is provided to illustrate the relationship the above terms have',
34494:'to each other and show how they may be aggregated for financial statement purposes. agencies should consult applicable omb guidance',
34495:'to determine what level of aggregation is most appropriate and acceptable. page 32 technical release 3 revised fasab handbook, version',
34496:'20 06/21 technical release 3 revised businesslineor service: farmserviceagency fund: a.ccc export guarantees b.agricultural credit insurance fund program: b1.farm ownership',
34497:'loans b2.farm operating loans, subsidized b3.farm operating loans, unsubsidized cohort: b3a.fy 1992 farm operating loans, unsubsidized b3b.fy 1993 farm operating',
34498:'loans, unsubsidized b3c.fy 1994 farm operating loans, unsubsidized b3d.fy 1995 farm operating loans, unsubsidized b3e.fy 1996 farm operating loans, unsubsidized',
34499:'risk category: b3e1.fy 1996 farm operating loans, unsubsidized, southwest region b3e2.fy 1996 farm operating loans, unsubsidized, northeast region case: b3aifiscal',
34500:'year 1992 unsubsidized loan to farmera b3aiifiscal year 1992 unsubsidized loan to farmer b page 33 technical release 3 revised',
34501:'fasab handbook, version 20 06/21 technical release 3 revised appendix c: summary of reestimate requirements the table below summarizes the',
34502:'reestimate requirements for the budget and financial statement presentations. budget financial statement interest rate reestimate frequency: at least one time',
34503:'when the cohort is 90 percent disbursed regardless of financial statement materiality. in addition, reestimates should be recorded in the',
34504:'budget whenever made for financial statement purposes. frequency: whenever the change in the interest rate materially affects thefinancial statements or,',
34505:'if no material change occurs prior to the cohort being 90 percent disbursed, at least one time when the cohort',
34506:'is 90 percent disbursed. timing: at the end of the fiscal year. timing: typically as of the end of the',
34507:'fiscal year. technical reestimate frequency: annually unless a different plan is approved by omb regardless of financial statement materiality. in',
34508:'addition, reestimates should be recorded in the budget whenever made for financial statement purposes. frequency: any year when material. also,',
34509:'agencies must disclose significant subsequent events after the reestimate date in the financial statement footnotes. timing: at the end of',
34510:'the fiscal year unless otherwise approved by omb. timing: typically as of the end of the fiscal year. also, agencies',
34511:'must disclose if the reestimate was calculated at a timeother than the end of the fiscal year. page 34 technical',
34512:'release 3 revised fasab handbook, version 20 06/21 technical release 3 revised appendix d: summary of selected reporting requirements15 principal',
34513:'statements credit reform information presented balance sheet credit program receivables and related foreclosed property, net of related subsidy allowance liabilities',
34514:'for loan guarantees statement ofnetcost subsidyexpensewillbeincludedas partofthegross programcostspresentvalueof fees will be included as an offset in calculating subsidy expense rather',
34515:'than recording actual collection of fees as revenue interest revenue and interest expense statementofchangesinnet appropriations receivedsubsidyandappropriations used position statement of',
34516:'budgetary appropriations received subsidy, borrowing authority, offsetting collections resources examples: collection of fees, principal, interest, subsidy from program account and',
34517:'obligations subsidy to financing account, direct loans, interest supplements, default claims and offsetting receipts example: negative subsidy or downward reestimate',
34518:'received by general fund receipt account statement of financing reconcile net obligations to net cost using components from the statements',
34519:'of budgetary resources, changes in net position and net cost. examples of reconciling items include upward/downward reestimates of subsidy expense,',
34520:'offsetting collections pertaining to fees and obligations 15refer to fasab standards for a complete listing of accounting and reporting requirements.',
34521:'the requirements in the standards may be supplemented by guidance provided in omb bulletin 0109 and omb circulara11. page 35',
34522:'technical release 3 revised fasab handbook, version 20 06/21 technical release 3 revised note disclosures credit reform information presented direct',
34523:'loans and defaulted guaranteed loans by program or fund presentation by program or fund required by omb bulletin 0109. comparative',
34524:'data current and prior years for note disclosures required by omb bulletin 01 09. sffas no. 18 requires the reconciliation',
34525:'of the subsidy cost allowancefor direct loansandnotdefaulted guaranteed loans. by program or fund: loans receivable gross, interest receivable, foreclosed property,',
34526:'allowance for subsidy cost present value, and net value of assets related to direct loan programs and loan guarantee programs',
34527:'total amount of loans disbursed for current and prior years reconciliationbetween the beginning and ending balance of the subsidy cost',
34528:'allowance at the reporting entity level guaranteed loans by program or fund presentation by program or fund required by omb',
34529:'bulletin 0109. comparative data current and prior years for note disclosures required by omb bulletin 0109. by program or fund:',
34530:'present value of post1991 liabilities for loan guarantees face value of guaranteed loans outstanding, amount of outstanding principal guaranteed reconciliationbetween',
34531:'the beginning and ending balance of the loan guarantee liability at the reporting entity level both direct loans and defaulted',
34532:'guaranteed loans and guaranteed loans by program or fund presentation by program or fund required by omb bulletin 0109. comparative',
34533:'data current and prior years for note disclosures required by omb bulletin 0109. by program or fund: total subsidy expense,',
34534:'and its components total subsidy expense for modifications total subsidy expense for reestimates, and their components, for current and prior',
34535:'year interest and technical subsidy rates for the total subsidy cost, and its components, for the current year total administrative',
34536:'expense description of the characteristics of loan programs discussion of events and changes in economic conditions, other risk factors, legislation,',
34537:'credit policies and subsidy estimation methodologies and assumptions that have a significant and measurable effect on subsidy rates, subsidy expense',
34538:'and subsidy reestimates nature of the modification of direct loans or loan guarantees, discount rate used to calculate the modificationexpense,',
34539:'andbasisfor recognizingagainor loss relating to the modification. restrictions on the use/disposal of foreclosed property, numberof properties heldandaverageholdingperiodby type or category,',
34540:'number of properties for which foreclosure proceedings are in process and changes from prior year’s accounting methods page 36 technical',
34541:'release 3 revised fasab handbook, version 20 06/21 federal financialaccountingandauditing technicalrelease 4: reporting on nonvalued seized and forfeited property status',
34542:'issued july 31, 1999 effective date for fiscal periods beginning after september 30, 1999. affects none. affected by none. summary',
34543:'an analysis of changes for all material nonvalued seized property should be disclosed in the financial statement footnotesin the same',
34544:'manner asprescribed for nonvalued forfeited property. page 1 technical release 4 fasab handbook, version 20 06/21 technical release 4 table',
34545:'of contents page summary 1 discussion of issues 5 implementation guidance 5 attachment: measurement of nonvalued items 6 appendix a:',
34546:'glossary [see consolidated glossary in appendix e] 7 page 2 technical release 4 fasab handbook, version 20 06/21 technical release',
34547:'4 introduction guidance for the accounting and reporting of seized and forfeited property held by federal entities is provided in',
34548:'the statement of federal financialaccounting standard no. 3, accounting for inventory and related property sffas no. 3, issued in october',
34549:'1993. this technical release is intended to clarify the required reporting of nonvalued seized and forfeited property. agencies that must',
34550:'deal with nonvalued seized and forfeited property should first refer to the hierarchy of accounting standards contained in the current',
34551:'office of management and budget omb bulletin on “form and content ofagency financial statements” for guidance. standards issued by governmentaccountability',
34552:'office gao and omb have precedence over other authoritative guidance for federal entities.1 this technical release supplements the relevant federal',
34553:'standards, but is not a substitute for and does not take precedence over the standards. this technical release includes a',
34554:'discussion of the issues and recommended implementation guidance that is intended to clarify the reporting of nonvalued seized and forfeited',
34555:'property. this guidance also provides more detailed terminology relating to the measurement of these non valued items seeappendixa [see consolidated',
34556:'glossary inappendix e of this document] for the list of terms. background federal entities implementing this standard have raised numerous',
34557:'questions requiring clarification of the reporting of nonvalued seized and forfeited property. numerous federal entities’ missions include the task of',
34558:'seizing nonvalued property. bureaus within the departments of the treasury and justice are most directly affected by this issue. nonvalued',
34559:'property either does not have a legal market in the united states, or doesnot have a salable value to the',
34560:'federal government. these items may be abandoned, embargoed, prohibited, sensitive, or seized for forfeiture. examples of such items could include',
34561:'illegal drugs, counterfeit currencies and monetary instruments, and firearms, which the federal government, as a matter of lawor policy, doesnot',
34562:'return to the owner orsell upon forfeiture. federal agencies that seize these typesof itemshave had difficulty in applying the concept',
34563:'of materialityand in the reporting of these types of items since they do not have monetary value. consequently, federal agencies',
34564:'have independently determined what types of nonvalued property should be disclosed 1the federalaccounting standardsadvisory board recommends accounting concepts andstandards to',
34565:'its principals; the department of the treasury, the office of management and budget, and the generalaccounting office. if all three',
34566:'principals approve a recommendation it is issued by omb and gao. page 3 technical release 4 fasab handbook, version 20',
34567:'06/21 technical release 4 in the financialstatements undersffas no. 3 and the unitsof measure, resultingin inconsistent disclosures between agencies and',
34568:'disclosures that lacked meaningful information. while nonvalued seized property does not have a monetary value to the federal government, the',
34569:'sensitive nature of much of this type of property requires the same level of accountability and security as valued property,',
34570:'if not more. agencies should ensure that their systems of internal controlare adequate to providesufficient accountabilityandsecurityoverthispropertyin order to meet the',
34571:'reporting requirements provided in sffas no. 3. sffas no. 3 prescribesthat seizedpropertyshallbeaccounted forinthe financialrecordsof the entity that is operating as',
34572:'the central fund see sffas no. 3, para. 60. central funds are established to finance the costs of the seizure,',
34573:'management, and disposition of property, and to receive the proceeds from the sale or disposition of that property. however, since',
34574:'nonvalued items do not have a financial value, the central fund is not responsible for reporting these items.2 accordingly, the',
34575:'seizing or custodial entity is responsible for maintaining sufficient internal records to maintain control over these items and would have',
34576:'reporting responsibility for non valued items. chapter 3 of the statement of federal financialaccounting concepts no. 1, objectives of federal',
34577:'financial reporting sffac no. 1, identifies the users of federal financial reports and their information needs. federal financial report users',
34578:'need information to assess the accountability, stewardship, and operating performance of federal agencies and programs. to address the information needs',
34579:'of federal financial report users, chapter 4 of sffac no. 1 defines the objectives of financial reporting as budgetary integrity,',
34580:'operating performance, stewardship, and systems and control. the discussion of these objectives emphasizes the concepts of the entity’s control over,',
34581:'accountability of, and accomplishment of federal programs and activities. furthermore, to provide additional useful perspective, sffas no. 3 includes a',
34582:'discussion on the concept of materiality. specifically, the concept of materiality includes both quantitative and qualitative considerations. thus, an item',
34583:'that is not considered material from a quantitative standpoint may be considered qualitatively material. accordingly, items would be considered qualitatively',
34584:'material if the judgment of a person relying on the information presented about such items would be influenced bythe omission',
34585:'or misstatement of information presented about those items. sffas no. 3 states that an item that is not considered material',
34586:'from a quantitative standpoint may be considered qualitatively material if it would influence or change the judgment of the financial',
34587:'statement user. it should be noted that sffas no. 3 also clearly states that items of a sensitive nature held',
34588:'by an entity that are not considered material to the entity’s financial statements need not be reported. 2this is generally',
34589:'because the central fund does not take custody of nonvalued items. page 4 technical release 4 fasab handbook, version 20',
34590:'06/21 technical release 4 discussion of issues the disclosure requirements for seized and forfeited property are outlined in paragraphs 66',
34591:'and 78 of sffas no. 3. among the requirements is a footnote disclosure to contain: a description of the composition',
34592:'of the property; the methods of valuing the property; restrictions on the use of forfeited property; changes from prior year',
34593:'accounting methods, if any; and an analysis of changes in seized and forfeited property. the analysis of changes in seized',
34594:'and forfeited propertyshouldprovidethe dollarvalue andnumberof propertiesonhand at thebeginningofthe year, seizures and forfeitures made during the year, property disposed of and',
34595:'method of disposition, and propertyon hand at the end of theyear. thisinformation should be presented by type of property where',
34596:'material. while sffas no. 3 provides adequate guidance for reporting seized and forfeited items with a financial value, the standard',
34597:'has not been interpreted and applied consistently with respect to nonvalued items. paragraph 148 of sffas no. 3 states that',
34598:'the standard was revised to address the disclosure requirements for nonvalued items. for these items, the standard does not require',
34599:'the reporting of financial value, but it clearly requires the disclosure of all material forfeited property, including those items with',
34600:'no financial value. however, the standard does not address the disclosure of nonvalued seized items. as a result, some reporting',
34601:'entities with seizing authority disclose nonvalued seized items, and others do not. clarification of the standard as it relates to',
34602:'nonvalued seized items is needed to ensure consistent implementation. with numerous professional disciplines involved in activities related to the seizure',
34603:'and reporting of nonvalued items, some terminology has different meanings depending on whether it is used in a legal, accounting,',
34604:'or program management context. to provide for consistent and meaningful reporting, clarified definitions and standard units of measure are necessary.',
34605:'implementation guidance an analysis of changes for all material nonvalued seized property should be disclosed in the financial statement footnotesin',
34606:'the same manner asprescribed for nonvalued forfeited property. page 5 technical release 4 fasab handbook, version 20 06/21 technical release',
34607:'4 the definitions in appendixa [see consolidated glossary inappendix e of this document] provide for consistent and meaningful reporting among',
34608:'federal agencies that seize and/or forfeit nonvalued items. the units of measurement for nonvalued items provided in the attachment are',
34609:'also designed to facilitate consistency in reporting among agencies. it is recognized that some agencies may be currently reporting in',
34610:'different measurement units and may be unable to convert their units of measurement for fy 1999 reporting. such agencies may',
34611:'continue to report on their current basis for fy 1999 but should conform with the units of measurement provided in',
34612:'theattachment for fy 2000 and subsequent years. attachment: measurement of nonvalued items category standard unit of measurement illegal drugs cannabis',
34613:'kilograms cocaine kilograms heroin kilograms methamphetamine/amphetamine various other categories3 various firearms and explosives legal firearms number illegal firearms number ammunition',
34614:'rounds explosives number counterfeit currency completed u.s. & foreign number of counterfeit bills credit cards number other e.g., other counterfeit',
34615:'monetary number instruments note: this is not intended to be an allinclusive list. other categories should be considered as appropriate.',
34616:'the provisions of this technical release need not be applied to immaterial items. 3other categories include material amounts of other',
34617:'drugs seized, to be separately reported by liquid weight, dry weight, tablets, or other appropriate measurement. page 6 technical release',
34618:'4 fasab handbook, version 20 06/21 technical release 4 appendixa: glossary see consolidated glossary in “appendix e: consolidated glossary.” page',
34619:'7 technical release 4 fasab handbook, version 20 06/21 federal financialaccounting andauditing technical release 5: implementation guidance on statement of',
34620:'federal financialaccounting standards 10:accounting for internal use software status issued may 14, 2001 effective date for periods ending after september',
34621:'30, 2001 affects none. affected by technical release 16 rescinded technical release 5 in its entirety. technical release 16, implementation',
34622:'guidance for internal use software rescinded technical release 5 in its entirety. page 1 technical release 5 fasab handbook, version',
34623:'20 06/21 federal financialaccounting andauditing technical release 6: preparing estimates for direct loan and loan guarantee subsidies under the federal',
34624:'credit reformact – amendments to technical release no. 3 preparing and auditing direct loan and loan guarantee subsidies under the',
34625:'federal credit reform act rescinding technical release 3: preparing and auditing direct loan and loan guarantee subsidies under the federal',
34626:'credit reform act status issued january 22, 2004 effective date immediately affects technicalrelease3: preparing and auditing direct loan and loan',
34627:'guarantee subsidies under the federal credit reform act affected by none. related guidance technical release no. 3 revised:auditing estimates for',
34628:'direct loan and loan guarantee subsidies under the federal credit reformact – amendments to technical release no. 3 preparing and',
34629:'auditing direct loan and loan guarantee subsidies under the federal credit reform act summary this technical release amends the implementation',
34630:'guidance for agencies to prepare and report credit subsidy estimates provided in technical release 3: preparing and auditing direct loan',
34631:'and loan guarantee subsidies under the federal credit reform act tr3, july 1999. the original technical release july 1999 contained',
34632:'both audit and accounting guidance. technical release 3 revised contains only the guidance for auditing estimates. page 1 technical release',
34633:'6 fasab handbook, version 20 06/21 technical release 6 table of contents page summary 1 materiality 5 effective date 5',
34634:'omb role 5 preparing direct loan and loan guarantee estimates 6 appendixa: technical glossary 21 appendix b: summary of selected',
34635:'reporting requirements 27 page 2 technical release 6 fasab handbook, version 20 06/21 technical release 6 introduction 1. thepurposeofthistechnicalreleaseistoamendtheimplementationguidanceforagencies to',
34636:'prepare and report credit subsidy estimates provided in technical release 3: preparing and auditing direct loan and loan guarantee subsidies',
34637:'under the federal credit reform act tr3, july1999. the mostsignificantchangesmade between the originaltr3 and this amended tr are as follows:',
34638:'a. removal of the audit guidance from this amended tr to only include the preparation guidance. b. clarification of omb’s',
34639:'role in the credit subsidy estimation and reestimation process. omb has statutory authority over subsidy estimates in the budget but',
34640:'has delegated the authority to calculate those estimates to the agencies. this document outlines guidance and tools provided by omb',
34641:'for entities to use during their calculations of the credit subsidy estimates. the guidance also states that omb provides economic',
34642:'assumptions to be used in the estimation and reestimation of subsidies. c. credit subsidy reestimates may now include 6 months',
34643:'of actual data and 6 months of projectedestimates. thiswouldbeachangefromthecurrentrequirementof9months of actual data and 3 months of projected estimates. the original',
34644:'technical release 3 july 1999 contained audit guidance, as well as accounting guidance. concurrent with the issuance of this technical',
34645:'release on accounting guidance, technical release 3 is being amended to contain only the audit guidance. 2. readers of this',
34646:'technical release should first refer to the hierarchy of accounting standards in statement onauditing standards sas 91, federal generallyacceptedaccounting principles',
34647:'hierarchy or seeau411. this technical release supplements the relevant accounting standards, but is not a substitute for and does not',
34648:'take precedence over the standards. this technical release is intended to facilitate consistency between the budgetary and financial statement presentation',
34649:'of subsidy estimates; however, fair presentation of subsidy estimates in the financial statements may be different from that in the',
34650:'presidents budget. 3. federal agencies are required to account for direct loans and loan guarantees in accordancewithstatement offederalfinancialaccountingstandardsno. 2, accounting',
34651:'for direct loans and loan guarantees sffas no. 2, sffas no. 18, amendments to accounting standards for direct loans and',
34652:'loan guarantees,andsffasno.19, technical amendments to accounting standards for direct loans and loan guarantees. in developing the financial accounting standards in',
34653:'sffas no. 2, the board recognized the value of having financial accounting support the budget and recommended that accounting standards',
34654:'for credit be consistent with budgeting under credit reform. further, page 3 technical release 6 fasab handbook, version 20 06/21',
34655:'technical release 6 the board stated that as more experience is gained, some modifications may be made in budgetaryrequirements. itistheintentionoftheboardthatsolongasthemodificationsare',
34656:'made on a credit reform basis and do not materially affect the basic recognition and measurement principles embodied in the',
34657:'accounting standards, accounting practices for direct loans and loan guarantees should change as needed in order to be consistent with',
34658:'the budget.1 this technical release provides guidance on acceptable accounting practice in light of current budgetary requirements. 4. this technical',
34659:'release includes sections on: omb’s role in the subsidy estimation and reestimation process and preparing direct loan and loan guarantee',
34660:'subsidy estimates 5. it also presents two appendices on: technical glossary and summary of selected reporting requirements 6. this technical',
34661:'release does not address loan asset sales and does not provide complete guidance for administrative expenses and pre1992 direct loans',
34662:'and loan guarantees. guidance on these areas can be found in sffas nos. 2, 18, & 19 and omb circular',
34663:'no. a 11 and omb bulletin no. 0109. additional guidance on loan asset sales will be addressed separately in the',
34664:'future. background 7. sincethecreditreformactof1990 was passed, agencies have struggled withthe numerous challenges in implementing the various provisions of the actespecially',
34665:'formulatingcreditsubsidyestimates. thistechnicalreleaseisdesignedtoprovideguidance on the preparation of credit subsidy estimates. there are three parts of subsidy: initial subsidy,modifications of subsidy andreestimates',
34666:'ofsubsidy. agoal ofthis technical release is to provide implementation guidance that will ensure greater financial statement consistency with the accounting',
34667:'standards set forth in statement of federal financial accounting standards sffas no. 2, accounting for direct loans and loan guarantees,',
34668:'sffas no. 18, amendments to accounting for direct loans and loan guarantees, and sffas no. 19, technical amendments to accounting',
34669:'for direct loans and loan guarantees.2 1 sffas no. 2, paragraph 17. also see sffas no. 2 paragraph 66. 2authoritative',
34670:'guidance for the recognition of many transactions under credit reform is also included in sffas no. 7, accounting for revenue',
34671:'and other financing sources,appendix b, guidance for the classification of transactions, paragraphs 362365 and 368 369. page 4 technical release',
34672:'6 fasab handbook, version 20 06/21 technical release 6 8. the technical release begins with a discussion of the omb’s',
34673:'role in the credit subsidy estimation and reestimation process. it continues by addressing procedures for preparing estimates and reestimates—including acceptable',
34674:'interim alternatives in the absence of the ideal data store and estimation methods. this technical release also provides guidance on',
34675:'acceptable sources of documentation for subsidy estimates and reestimates. materiality 9. the provisions of this guidance need not be applied',
34676:'to immaterial items. effective date 10. the guidance outlined in this technical release is effective immediately. omb role 11. under',
34677:'thefederalcreditreformactof1990,asamended,ombis responsiblefor subsidy estimates published in the president’s budget. omb has delegated the authority to the agencies to calculate estimates',
34678:'but retains the responsibility and final approval of subsidy estimates, reestimates, and modification cost estimates. for agencies that have credit',
34679:'programs, omb provides guidance and specific tools for credit budgeting. 12. ombcircularsa11preparation, submission, andexecutionofthebudget anda129 policies for federal credit programs',
34680:'and nontax receivables provide guidance to agencies on definitions, procedures and rules for calculating subsidy estimates and reestimates for the',
34681:'president’s budget and modification cost estimates, obligation of budget authority for the credit program’s cost, and credit and receivables policy.',
34682:'13. the credit subsidy calculator csc is a computer program provided to the agencies to calculate the cost of direct',
34683:'loans and loan guarantees using the agencies’ cash flow estimates. theombcirculara11requiresthatallagencieswithcreditprogramsmustuse the csc to discount the credit subsidy estimate and',
34684:'reestimate cash flows that they are responsible for generating. page 5 technical release 6 fasab handbook, version 20 06/21 technical',
34685:'release 6 14. omb provides spreadsheets and instructions to calculate reestimates and interest paid and received for financing accounts.3 15.',
34686:'each year, in preparing the president’s budget, omb provides agencies with a set of economic assumptions that must be used',
34687:'when determining budget estimates. some of these assumptions, such as gross domestic product gdp, are used for both credit programs',
34688:'and others. for credit programs specifically, the economic assumptions include the discount rates, which are derived from the treasury yield',
34689:'curve, used to calculate subsidy estimates. the discount rates are built into the most recent version of the csc. prior',
34690:'year actual discount rates and credit related assumptions are available from omb ten business days prior to the close of',
34691:'the fiscal year. preparing direct loan and loan guarantee estimates 16. preparing reliable and timely direct loan and loan guarantee',
34692:'subsidy estimates must be a joint effort between the budget, cfo and program offices at each agency. these offices should',
34693:'work together to ensure that the procedures and internal control4 outlined in this section are implemented and operating as designed.',
34694:'however, some agencies may not be able to effectively implement all of these procedures, since they have not yet developed',
34695:'the ideal data stores or methods of estimation necessary. therefore, until the required information on all cash disbursements and collections',
34696:'related to direct or guaranteed loans can be collected at the case level and summarized, by cohort and program, the',
34697:'acceptable alternatives identified in this technical release will need to be utilized to provide the necessary information for developing subsidy',
34698:'estimates. 17. agencies must accumulate sufficient relevant and reliable data on which to base cash flow projections. it is important',
34699:'to note that agencies should prepare all estimates and reestimates based upon the best available data at the time the',
34700:'estimates are made. agencies should prepare and report reestimates of the credit subsidies, in accordance with sffas no. 2, 18,',
34701:'and 19, to reflect the most recent data available as discussed in the reestimatesectionofthistechnicalrelease. theombcirculara11alsoprovidesguidance 3 the csc and spreadsheets',
34702:'for calculating reestimates and financing account interest are available on the federal credit support page http://www.omb.gov/credit. 4 internal control is',
34703:'an integral component of an organization’s management that provides reasonable assurance regarding the achievement of reliable financial reporting, effective and',
34704:'efficient operations, and compliance with applicable laws and regulations. internal control consists of the control environment, risk assessment, control activities,',
34705:'information and communication and monitoring. page 6 technical release 6 fasab handbook, version 20 06/21 technical release 6 onreestimatingcreditsubsidies. guidanceonthetypesofsupportingdocumentationthatis',
34706:'acceptable is found in paragraphs 20 22 of this technical release. 18. in certain limited instances, informed opinion may be',
34707:'used to support cash flow projections in the absence of historical data. informed opinion refers to the judgment of agency',
34708:'staff or others who make subsidy estimates based on their programmatic knowledge and/or experience without using a fully satisfactory information',
34709:'store and, in some cases, without using an econometric or other statistical model. informed opinion may be used only as',
34710:'a last resort when relevant historical data and/or modeling capabilities are not available. this could occur when a new program',
34711:'hasbeen established or when the congresshas changed anexistingprograminwaysthatcannotberepresentedbyhistoricaldata. informedopinion should therefore be used as an interim method only, and the',
34712:'agency should develop an action plan to establish an information store, appropriate models, and supporting documentation. 19. certain conditions must',
34713:'be met before informed opinion will be considered an appropriate source of information. first, the experts qualifications, such as professional',
34714:'or academic certification or length and kind of experience, must be assessed. then, the basis of the stated opinion must',
34715:'be articulated and documented in detail. for example, a statistician may be best qualified to determine the appropriate kind of',
34716:'model for estimated cash flows using limited or imperfect data. most importantly, the expert must document why that particular projection',
34717:'is appropriate for that particular program. 20. documentation must be provided to support the assumptions used by the agency in',
34718:'the subsidy calculations. this documentation will not only facilitate the agencys review of the assumptions,akeyinternalcontrol,itwillalsofacilitatetheauditorsreview. documentation should be complete and',
34719:'stand on its own, i.e., a knowledgeable independent person could performthesamestepsandreplicatethesameresultswithlittleornooutsideexplanationor assistance. if the documentation were from a source that',
34720:'would normally be destroyed, then copies should be maintained in the file for the purposes of reconstructing the estimate. 21.',
34721:'management should ensure that the following documentation is available for initial subsidy estimates, reestimates, and modifications of existing credit programs:',
34722:'1. procedures for calculating the subsidy estimate, 2. review and approval process of the subsidy estimate, including the signoff procedure',
34723:'within the agency, 3. calculation of the recorded subsidy estimates, including the underlying assumptions and cash flow model, 4. historical',
34724:'supporting documents used in the underlying assumptions, page 7 technical release 6 fasab handbook, version 20 06/21 technical release 6',
34725:'5. documentation of relevant supporting actual cash and economic experience including the date and source of reports, and how recently',
34726:'the data were updated, which may include: cash reports on historical performance, historical data and trends, citing sources of information',
34727:'and relevant time frame, sensitivity analysis or other analysis that identifies the most critical factors, reports from the accounting or',
34728:'management systems showing trends actuarial studies, experience of other agencies with similar programs, emergencies acts of god or legislated changes',
34729:'acts of congress, such as changes in the program terms, maximum allowable loan amount, total program size, or characteristics of',
34730:'the credit programs borrower population, and economic and/or industry data and subsequent analyses, including industry studies, journal articles, trade papers,',
34731:'and third party studies.5 6. documentation of relevant program design factors, which may include: programdefinitionincludingfees,graceperiod,termtomaturity,borrowerinterest rates, legal definitions, and enabling',
34732:'or enacted legislation, legislation or regulations changing the terms, maximum allowable loan amount, total program size, or characteristics of the',
34733:'credit programs borrower population, program eligibility requirements, lender agreements detailing the terms of the guarantee, and borrower contracts outlining the',
34734:'terms and conditions of the loan or guarantee. 22. management should ensure that the following documentation is available for new',
34735:'programs or changes to existing programs that may not have historical supporting documentation for cash flow assumptions and spreadsheets. in',
34736:'the absence of valid and relevant historical experience as the support for cash flow assumptions, the agency should document the',
34737:'basis for cash flow assumptions. typical support will include: relevant experiences from other agencies, including documentation of why another agencys',
34738:'experience is relevant, as well as similarities and differences particularly possible biases between the other agencys experience and the changes',
34739:'to existing programs or new programs, extrapolation from subsets of prior program activity, e.g., while prior loans were not targeted',
34740:'for single heads of households, it may be possible to identify prior loans that were made to single heads of',
34741:'households and the experience of such loans in prior records. 5 for example, past data may document the historical relationship',
34742:'between interest rates, whereas an independent study may demonstrate how trends in past data are expected to change in the',
34743:'future. page 8 technical release 6 fasab handbook, version 20 06/21 technical release 6 assumptions used by underwriters for the',
34744:'purposes of determining eligibility, loan approval, or credit scoring. privatesectorproxiesforrisk,suchasbondratingstoassessdefaultrisk,maybe usedwhenthereisnorelevantfederalgovernmentexperience. forexample,an agency may consider using bond ratings for a',
34745:'state agency that finances similar loan programs, such as education, farm, or housing, with bonds. extrapolations from private sector lending',
34746:'experience including documentation explaining why this experience is applicable to the agencys credit program and possible biases for which an',
34747:'adjustment is needed, e.g., different borrower characteristics. expert opinion may also be used as an interim measure to support cash',
34748:'flow assumptions. in these cases, the agency must document the expert’s qualifications, such as professional or academic certification or length',
34749:'of experience, as well as the basis of the stated opinion. in addition, the following documents should be maintained in',
34750:'support of the experts opinion: memos from conversations with outside experts, reports and studies on similar industry conditions, minutes from',
34751:'internal meetings describing the basis for any assumptions or changes in assumptions, and  previous studies conducted by the expert,',
34752:'including industry studies, journal articles, and third party studies. overall cfo/budget procedures and internal control 23. document the procedures and',
34753:'flow of information used in developing the agencys subsidy estimates at a high level, e.g., flow chart with supporting narrative.',
34754:'these documents should be used to establish consistent procedures for developing the subsidy estimates across funds/programs/cohorts. these documents should also',
34755:'include a discussion of who is responsible for each step of the estimate as well as the review and approval',
34756:'process followed. documented procedures are necessary to communicate information on the subsidy estimation and reestimation process to employees as well',
34757:'as other interested parties, such as auditors and omb examiners. also, when employee turnover is experienced,thesedocumentedprocedureswillprovidevitalinformationfornewemployees on how to complete',
34758:'reliable, well supported estimates of the costs of credit programs. 24. document the agencys cash flow models used, the rationale',
34759:'for selecting the specific methodologies, and the degree of calibration6 within the models. also, document the 6 calibration is the',
34760:'degree of precision within the model, i.e., the models ability to accurately predict the cash flows of a given credit',
34761:'program. the degree of calibration within the model can be documented by charts or graphs showing projected cash flows versus',
34762:'the actual cash flows by year and cohort. this document would analyze the variance between projected cash flows and actual',
34763:'cash flows over time. page 9 technical release 6 fasab handbook, version 20 06/21 technical release 6 sources of information,',
34764:'the logic flow, and the mechanics of the models including the formulas and other mathematical functions. in addition, document the',
34765:'controls over the modelsusedbytheagencyinpreparingcashflowworksheets. further,documentthatthe cash flow models reflect the terms of the loan contracts and, in a loan guarantee',
34766:'program, the loan guarantee contracts. additional details regarding internal control are discussed in the specific fund/program procedures and controls section',
34767:'of the technical release. 25. for agencies that have not yet implemented the ideal data store or implemented the estimationmethodsdescribed',
34768:'inthe model creditprogrammethodsanddocumentationfor estimating subsidy rates and the model information store issue paper 96cr7, available from theaapc web page http://fasab.gov/aapc/cdreform/othercrddoc.htm,',
34769:'document managements strategic plans towards improving the agencys information store and estimation methods. this strategic plan should include who is',
34770:'responsible for various aspects of the plan and milestone dates for significant plan segments. finally, it should document the progress',
34771:'at achieving the plan goals. 26. ensure that general data and assumptions applicable to more than one cohort are used',
34772:'consistently for current year estimates and reestimates. for example, the overall economic conditions should be consistent for all cohorts within',
34773:'a program for a given fiscal year or management should document the reasons for the deviations, e.g., different economic assumptions',
34774:'could appropriately vary for specific geographic regions. 27. ensure that estimates and all key assumptions used in preparing the budget',
34775:'and financial statements have been coordinated with both the program and accounting offices. 28. managementshouldassesstheimpactofchangesinlawsorregulationsonthereliabilityof estimatesandshouldensurethatthecashflowmodelreflectsthesechanges. forexample, a legislative program',
34776:'change may include provisions about maturity or type of borrowers that are outside the scope of past agency experience or',
34777:'may include program changes that shift the composition of new lending toward more or less risky borrowers. 29. the budget',
34778:'and accounting offices should work together to ensure that cash flow models are updated to reflect the actual cash flows',
34779:'and terms of the loan program recorded in the accountingrecords. wherematerialdifferencesexistbetweentheinitialbudgetaryestimate and the actual cash flows, the differences should be',
34780:'investigated and reestimates and/or adjustments to the model should be made as required.7 actual obligations, disbursements, recoveries, and receipts should',
34781:'be recorded on a casebycase basis. the detail of these 7reestimates maynot berequired in all caseswhere material differences exist betweentheinitial',
34782:'budgetary estimate and the actual cash flows. for example, if offsetting differences exist in cash flows, such as positive difference',
34783:'in default recoveries and a negative difference in fees, a reestimate may not be necessary. page 10 technical release 6',
34784:'fasab handbook, version 20 06/21 technical release 6 transactions should be reflected in the accounting records. however, when this level',
34785:'of detailed information is not available, it may be necessary for the agency to record transactions on another basis. for',
34786:'example, agencies may only receive information in summary from entities that actually make the loans that the government guarantees. as',
34787:'a result, the agency may need to estimate cash flowsbased on a detailed analysisof the loan portfolio as a whole',
34788:'and allocate program level cash receipts and disbursements to individual cohorts on an appropriate basis. the basis for this allocation',
34789:'should be clearly documented. transactions may also be recorded based on estimates derived from representative samples of loans, and/or related',
34790:'transactions, e.g., sampling of loan receipts to allocate cash receipts to cohorts. 30. interest expense and income should be calculated',
34791:'in accordance with guidance from omb. discount rates used should be based on the authorized rates from omb. 31. the',
34792:'agency should have an audit trail from individual transactions to the subsidiary ledgers to the general ledger. this will ensure',
34793:'that cash transactions can be identified by type so that they may be identified by subsidy expense component. sffas no.',
34794:'18 states: “reporting entities… should disclose for each program …the subsidy expense by components as defined in paragraphs 25 through',
34795:'29 [sffas no. 2], recognized for the direct or guaranteed loans disbursed in those years [current reporting year and the',
34796:'preceding reporting year]…” 32. when a direct loan or loan guarantee is modified as defined by sffas no. 2 additional',
34797:'guidance provided in the omb circulara11, the nature of the modification, the estimated effect on cash flows, and key assumptions',
34798:'should be documented in the same way as the original subsidy estimate. modifications do not include routine administrative workouts of',
34799:'troubled individual loans or actions that are permitted within the existing contract terms.8 33. ensure that the financial statements consolidate',
34800:'the activity of the program accounts, the financing accounts, and, if needed, the negative subsidy receipt accounts. negative subsidy receipt',
34801:'accounts are established for programs that have negative subsidies or downward subsidy reestimates except certain programs classified in the budget',
34802:'as mandatory. 8 neither the federal credit reformact as enacted in 1990 nor its amendments in the balanced budgetact of',
34803:'1997 explicitly states that modifications do not include routine administrative workouts. however, the definition of modification in the 1990act was',
34804:'interpreted as excluding routine administrative workouts, and the definition in the 1997amendmentsisinterpretedinthesameway. thisinterpretationisconsistentwithparagraph44ofsffas no. 2. further, the joint explanatory statement',
34805:'of the committee of conference on h.r. 2015, the balanced budgetact of 1997, states that workouts are not assumed to',
34806:'be included in the definition of modifications. the conference agreement does not change the treatment of workouts as implemented under',
34807:'the federal credit reformact of 1990. page 11 technical release 6 fasab handbook, version 20 06/21 technical release 6 34.',
34808:'cash flow spreadsheets should be prepared on a cohort or disbursement year basis, as appropriate. cash flow spreadsheets prepared on',
34809:'a cohort basis include one line for each cashflowtypeforexample,principalpayments,fees,ordefaults. cashflowspreadsheets prepared on a disbursement year basis include one line per',
34810:'disbursement year for each cash flow type for example, principal payments associated with first year disbursements, principal payments associated with',
34811:'second year disbursements, etc.. the documentation for the credit subsidy calculator provides details on how to indicate that a particular',
34812:'cash flowlineisassociatedwithaparticulardisbursement. whenloandisbursementsoccurover multiple years, cash flow spreadsheets prepared on a disbursement year basis will produce a more precise subsidy',
34813:'calculation. however, when agencies are unable to provide this level of detail, combinations of multiple disbursement years may be used',
34814:'as an approximation. 35. establishsecurityoveraccesstotheombcreditsubsidycalculatortoadequatelyprotectit fromunauthorizeduseandcorruption. forexample,agencymanagementshouldestablish procedures to ensure that the desktop workstations where the omb credit subsidy calculatorresidesarepasswordprotected.',
34815:'inaddition,thedatausedasinputorgenerated as output should also be safeguarded and reviewed for errors. specific fund/program procedures and controls 36. procedures in place',
34816:'should ensure that cash flow estimates for budgetary and financial statement reporting purposesare based on actualcash flowsinprevious yearsto the extent',
34817:'itisappropriate. agenciesshouldcomparebudgetedtoactualcashflowstoensurethatthe cashflowmodelsreflecttheactualcashflowsfromtheaccountingrecords. wherematerial differences exist between the initial budgetary estimate and the actual cash flows, the differences should be',
34818:'investigated and reestimates and/or adjustments should be made as required.9 changes in key factors and assumptions used as a baseline',
34819:'e.g., disbursement rates, default rates, recovery rates, time periods, etc. must be explained, supported, and documented. for example, recoveries have',
34820:'averaged a given percentage for the past four yearsandthisrecoveryrate hadbeenconsistentlyusedin preparing cash flowworksheets. however, during the past year, events have',
34821:'occurred which have increased the recovery rate and these events are expected to continue in the future. as a result,',
34822:'the agency may decide to use a recovery rate above the historical average. 9reestimates may not be required in all',
34823:'cases where material differences exist between the initial budgetary estimate and the actual cash flows. for example, if offsetting differences',
34824:'exist in cash flows such as a positive difference in default recoveries and a negative difference in fees, a reestimate',
34825:'may not be necessary. page 12 technical release 6 fasab handbook, version 20 06/21 technical release 6 37. sensitivity analysis',
34826:'or other testing of the agency cash flow models used in developing the subsidy estimates should be performed to identify',
34827:'which cash flow assumptions have the greatest impact on the credit subsidy rate. to perform sensitivity analysis, management must first',
34828:'identify the root of each cash flow assumption10 to ensure that all subsequently related formulas and assumptions are adjusted appropriately.',
34829:'generally, each root assumption should be individually adjusted by a fixed proportion e.g., plus and minus 10 percent, and the',
34830:'revised cash flows run through the omb credit subsidy calculator to determine the assumptions effect on the subsidy rate. timing',
34831:'assumptions for defaults, recoveries, prepayments, etc. should also be adjusted by a fixed amount e.g., plus and minus one year.',
34832:'the recovery assumption should be adjusted along with the timing of recovery assumption to ensure that a realistic relationship between',
34833:'these two assumptions continues to exist, i.e., to test the sensitivity of recoveries, the default timing assumption must also be',
34834:'adjusted to ensure that the recovery occurs after the default. those assumptions that caused the largest change in the subsidy',
34835:'rate are determined to be the key cash flow assumptions. 38. key assumptions, identified by the sensitivity analyses that are',
34836:'utilized in the process of developing estimates, should be documented including the rationale, justification, and source of supporting documentation. 39.',
34837:'the accounting office should maintain detailed subsidiary accounting records by program, cohort, risk category if applicable and case individual direct',
34838:'loan or loan guarantee. 40. thecashflowestimationprocess,includingallunderlyingassumptions,shouldbereviewed andapprovedat the appropriatelevel including revisionsand updatestotheoriginalmodel. cash flow models should be tested for reliability',
34839:'as part of the approval process by comparing estimated cash flows to actual cash flows and assessing the models ability',
34840:'to replicate a credit programs performance. 41. the agency should do trend analysis of the credit subsidy expense components, i.e.,',
34841:'interest, defaults, fees, and other. when unusual fluctuations are identified, they should be investigated and explained. 42. the agency must',
34842:'document the options used in the omb credit subsidy calculator and the reasons those options were selected.11 10 the root',
34843:'of the cash flow assumption is the starting point for the assumption, i.e., there are no preceding formulas or related',
34844:'inputs that would affect the assumption. 11 omb contracted with an independent public accounting firm to review the omb credit',
34845:'subsidy calculators compliance withthecreditreformact. results oftheaudit maybe obtainedfromthe applicable omb program examiner or omb’s budgetanalysis branch. page 13 technical release',
34846:'6 fasab handbook, version 20 06/21 technical release 6 43. the agency should determine whether the proper dollar scale e.g.,',
34847:'whole dollars, hundreds, thousands, etc. for the cash flow spreadsheets was used. some program subsidy rates, particularly those for programs',
34848:'disbursing over several years, may be influenced slightly with the scale of the program. therefore, management should determine whether rounding',
34849:'to three decimal places has no significant effect on the cash flow spreadsheet values and the subsidy rate. 44. the',
34850:'agency should determine whether the omb credit subsidy calculator options selected properly reflect specific characteristics of the applicable credit program.',
34851:'for example, the omb credit subsidy calculator option for the timing of principal and interest payments for direct loan program',
34852:'and the timing of commitmentsand disbursementsbythe privatelender of a loan guaranteed should agree with the programs credit terms. 45. the',
34853:'agency should review the omb credit subsidy calculator output to determine whether any warning messages are listed and determine why',
34854:'the situation causing the warning message was not resolved and whether not eliminating the error could have any impact on',
34855:'the subsidy rate calculation. also, if applicable, the agency should determine whether the suppression of any error messages was appropriate',
34856:'by checking the agencys cash flow spreadsheettodeterminewhetherthe suppresswarnings commandwasusedandassess the impact these suppressed error messages could have on the cash',
34857:'flows. 46. the agency should review trends in the direct loan subsidy allowance account balance and/or the liability for loan',
34858:'guarantees account balance as compared to the outstanding balances of loans and/or guarantees. any unusual fluctuations identified should be investigatedandexplained.',
34859:'whenunusualfluctuationsoccur,ananalysisbycohortmaybe helpful to identify the causes. reestimates 47. ombcirculara11has establishedcriteriafor whenagenciesshouldcalculatecredit subsidy reestimates for the budget. it states that interest',
34860:'rate reestimates of the subsidy cost of a cohort of direct loans or loan guarantees must be made when a',
34861:'cohort has substantially disbursed i.e., when at least 90 percent of the direct loans or guaranteed loans have been disbursed.',
34862:'the computation should be made after the close of the fiscal yearin which thiscriterion ismet, unless a later time within',
34863:'the same fiscal year isapproved by the omb representative with primary budget responsibility for the credit account; and that technical',
34864:'reestimates of the subsidy cost of a cohort of direct loansor loan guarantees must be made after the close of',
34865:'each fiscal year as long as the loans are outstanding, unless a different plan is approved by the omb representative',
34866:'with primary budget responsibility for the credit account. the different plan might be with regard to the time when reestimates',
34867:'are made within the year or the frequency of reestimates. if the plan page 14 technical release 6 fasab handbook,',
34868:'version 20 06/21 technical release 6 allows technical reestimates to be made less frequently than every year, it should require',
34869:'technical reestimatesto be made for any year when anyone of four conditions is met.12 the period for which reestimates are',
34870:'to be calculated includes the first year that loans were disbursed. reestimates are calculated as of the end of the',
34871:'fiscal year regardless of when the actual computation is performed. 48. sffasno. 2statesthat thesubsidycostallowancefordirectloansandtheliabilityforloan guarantees are reestimated each year as',
34872:'of the date of the financial statements. since the allowance or the liability represents the present value of the net',
34873:'cash outflows of the underlying direct loans or loan guarantees, the reestimation takes into account all factors that may have',
34874:'affected the estimate of each component of the cash flows, including prepayments, defaults, delinquencies and recoveries.13 any increase or decrease',
34875:'in the subsidy cost allowance or the loan guarantee liability resulting from the reestimates is recognized as a subsidy expense',
34876:'or a reduction in subsidy expense as of the end of the fiscal year to which it applies. reporting the',
34877:'subsidy cost allowance of direct loans or the liability of loan guarantees and reestimates by component is not required. sffas',
34878:'no. 7, paragraphs 362363, states that “[a] negative subsidy…” or “…downward subsidy reestimate is recognized as a direct reduction in',
34879:'expense, not as a revenue, gain, or other financing source.” in addition, sffas no. 18 requires that the interest rate',
34880:'and technical reestimates be disclosed separately for each program. 49. the table below summarizes the reestimate requirements for the budget',
34881:'and financial statement presentations. 12 these four conditions are: 1 based on periodic schedules established in coordination with omb, 2',
34882:'when a major change in actual versus projected activity is detected, 3 when a material difference is detected through monitoring',
34883:'triggers developed in coordination with omb, and 4 when a cohort is being closed out. 13 omb has an alternative',
34884:'method of computing reestimates, the “balances approach,” which compares a the net present value of the best current estimate of',
34885:'the remaining cash flows with b the net balance owed to treasury for directloanprogramsorthenetbalanceondepositwithtreasuryforloanguaranteeprograms. inestimatingthenet present value of the remaining',
34886:'cash flows, agencies would still need to estimate future cash flows based on actual experiencewithcashflowstodateandforecastsofotherfactors. theywouldtherefore stillneedto maintain historical cash',
34887:'flow data, at the subsidy component level, to analyze the sources of error in the estimates of cash flows for',
34888:'past periods. page 15 technical release 6 fasab handbook, version 20 06/21 technical release 6 budget financial statement interest rate',
34889:'reestimate frequency: at least one time when the cohort is 90 percent disbursed regardless of financial statement materiality. in addition,',
34890:'reestimates should be recorded in the budget whenever made for financial statement purposes. frequency: whenever the change in the interest',
34891:'rate materially affects the financial statements or, if no material change occurs prior to the cohort being 90 percent disbursed,',
34892:'at least one time when the cohort is 90 percent disbursed. timing: at the end of the fiscal year. timing:',
34893:'typically as of the end of the fiscal year. technical reestimate frequency: annually unless a different plan is approved by',
34894:'omb regardless of financial statement materiality. in addition, reestimates should be recorded in the budget whenever made for financial statement',
34895:'purposes. frequency: any year when material. also, agencies must disclose significant subsequent events after the reestimate date in the financial',
34896:'statement footnotes. timing: at the end of the fiscal year unless otherwise approved by omb. timing: typically as of the',
34897:'end of the fiscal year. also, agencies must disclose if the reestimate was calculated at a time other than the',
34898:'end of the fiscal year. 50. aninterestratereestimateofthesubsidycostofacohortofdirectloansorloanguarantees is made for the difference between a the interest rate assumed in the',
34899:'presidents budget for the fiscal year in which the subsidy is obligated, and b the actual annual interest rates prevailingduringthe',
34900:'yearsofdisbursement. ombcirculara11instructsthataninterest rate reestimate should be made when the cohort is 90 percent disbursed.14 however, when an interest rate change',
34901:'has occurred that would materially affect the financial statements, 14 if the interest rate assumption is a key assumption, agencies',
34902:'should consider using sensitivity analysis, as discussed in thesection entitled specific fund/program procedures and controls, to determine whether the change',
34903:'in interestwouldhaveamaterialaffectonthefinancialstatements. to do this,agencies wouldneedto repeatedlyadjust the interest rate by predetermined increments, e.g., plus or minus 100 basis points,',
34904:'and rerun the revised cash flows through the omb credit subsidy calculator to determine the impact on the subsidy rate.',
34905:'agencies should then multiply the revised subsidy rate by the assumed disbursement amount, to calculate financial statement impact. as a',
34906:'result, agencies will be able to document the amount of interest rate change that would be necessary, under an assumed',
34907:'disbursement amount, to materially affect the financial statements. page 16 technical release 6 fasab handbook, version 20 06/21 technical release',
34908:'6 agencies should calculate the interest rate reestimate and include the reestimate in the current years financial statements. 51. atechnical',
34909:'reestimateofthe subsidycostofacohortofdirectloans or loan guaranteesis madeforallchangesinassumptionsotherthandiscountrates. ifombhasapprovedaplan that permits an agency to make technical reestimates less often than annually, the',
34910:'agency should monitor the indicators specified in that plan to determine whether a reestimate is needed for other reasons: in',
34911:'particular, because it is needed to comply with other parts of that plan and/or because the reestimate has a material',
34912:'financial statement impact. 52. an agency that does not plan to perform technical reestimates annually must establish a systematic process',
34913:'to determine each year whether a reestimate is necessary and, if material to the financial statements as a whole, the',
34914:'reestimate must be reflected in the current years financial statements. if an acceptable monitoring process is not in place, reestimates',
34915:'must be made annually for the financial statements. an acceptable process would generally include the following: a. a comparison between',
34916:'actual experience to date and the assumptions that had been previously used for the period to date. an acceptable process',
34917:'would regularly but notlessthanannuallycomparetheactualcashflows, bysubsidycomponent, reported by the accounting office at the program level to those used in the previous',
34918:'budget estimates. b. differences between the current best estimate of future cash flows and the assumptions that had been previously',
34919:'used. an acceptable process would also include procedures that identify and systematically monitor significant economic and other assumptions underlying cash',
34920:'flows in order to determine whether changes have occurred in the expected future cash flows that make a reestimate necessary.',
34921:'the significant assumptions would be expected to differ from program to program according to each programs own attributes. economic changes',
34922:'could include, for example, recessions, changes in interest rates, and changes in the market value of collateralorinternationaleconomicfactorssuchastradedisruptions. otherchanges could include,',
34923:'for example, legislative or administrative program changes of the kind that do not meet the omb circulara11 definition of a',
34924:'modification, operational changes such as reduction in staff because of budgetary constraints that would affect loan servicing, environmental changes, or',
34925:'war. the impact of these changes on the estimates of future cash flows and, if necessary, the cash flow models',
34926:'must be assessed and documented. c. special emphasis for programs that have peak periods where applicable, an acceptable monitoring process',
34927:'should provide extra emphasis during periods when cohorts are experiencing significant increases or decreases in defaults, prepayments, recoveries, or other',
34928:'cash flows. for example, suppose for one particular program historical experience has demonstrated that a cohort usually experiences increased page',
34929:'17 technical release 6 fasab handbook, version 20 06/21 technical release 6 defaults starting in year three which peak in',
34930:'years 6 through 8. historical experience has further demonstrated that defaults decline steadily beginning in year nine, until a stabilized',
34931:'rate is reached in years 13 through 30. during years 3 through 13, the agencys monitoring efforts should compare actual',
34932:'cash flows for defaults reported by the accounting department to estimated default cash flows as a way of validating the',
34933:'default cash flow assumption and determining whether a reestimate or adjustment to the overall rate or timing is necessary. however,',
34934:'once the monitoring system has demonstrated that the cohort has stabilized and no significant unusual events have occurred, it is',
34935:'less likely that annual reestimates would be necessary. 53. inyearsforwhichreestimatesaremade,theyshouldnormallybemadeasofseptember30 of the reporting period using a data base that is',
34936:'complete through the same date. if omb has approved a plan to make reestimates at another time during the year,',
34937:'this will be acceptable for financial statement purposes if the following conditions are met: a. the technical reestimate of the',
34938:'subsidy cost is made for a 12month period ending not earlier than march 31, using actual transaction data through march',
34939:'31 of the reporting year. agencies may also use actual transaction data beyond the march 31 date through to the',
34940:'end of the reporting period. the reestimated subsidy cost is compared withthepreviousestimateofthesubsidycostfortheyearendedseptember30.15 the differenceistheamountofthereestimate. alternatively,forthelasttwoquartersofthe fiscal year or for a',
34941:'portion of this period, agencies may estimate those quarters’ cash flows on a reasonable basis e.g., the last two quarters’',
34942:'cash flows from the previous fiscal year, or if the cash flows are relatively uniform, two quarters of the originally',
34943:'estimated cash flows, or the average cash flows of the previous two quarters. for cohorts with an interest rate reestimate,',
34944:'the interest rate reestimate and a revised technical reestimate16 would be calculated after september 30 using actual interest rates. b.',
34945:'in order to use this approach, agencies must ensure that the monitoring process described previously includes monitoring major events occurring',
34946:'during the third and fourth quarters that could have a significant impact on the subsidy reestimate. if such an event',
34947:'is identified, an adjustment to the reestimate of the affected cohorts may be necessary. c. agencies may be unable to',
34948:'calculate, and reflect in the financial statements, a reestimate for major events occurring during the third and fourth quarters because,',
34949:'at this point, the effects of the major event may not yet be determinable. in this case, 15 see footnote',
34950:'12 for a discussion of the balances approach for calculating reestimates. 16 arevisedtechnical reestimateinthis contextis limitedtothechangeinthereestimatedueto reviseddiscountrates and not to',
34951:'any difference in cash flows. page 18 technical release 6 fasab handbook, version 20 06/21 technical release 6 agenciesmustdisclosesucheventsinthefootnotesasapotentialmaterialuncertainty. the',
34952:'disclosure will further acknowledge that this/these events will be taken into consideration in making the reestimate for the following year',
34953:'or once the impact of the events is determinable. d. this policy, when adopted by an agency, with ombs approval,',
34954:'will be disclosed in the footnotes to the agencys financial statements. 54. if omb has approved a plan to make',
34955:'reestimates at another time during the year that does not meet the conditions detailed in paragraph 47 above, its financial',
34956:'statement impact should be evaluated. the conditions listed in paragraph 47 are just one acceptable scenario that details the steps',
34957:'that agencies should perform to ensure that the financial statements are materially correct. agencies may develop alternative procedures to ensure',
34958:'financial statements are fairly presented without performing a full reestimate as of the date of the financial statements. the agency',
34959:'and omb examiner may wish to collaborate in developing the alternative procedures that will best address each individual agencys workload,',
34960:'the needs of the budget, financial statements, and all applicable standards. 55. if the most recent estimated cash flows of',
34961:'a cohort are different from the actual experience, thesedifferencesandthereasonsforthesedifferencesmayaffectthefutureestimatedcash flows of that cohort. the effects on the future cash flows',
34962:'of that cohort need to be assessed and included in the reestimate, and the reasons for the estimated effects need',
34963:'to be documented. 56. reestimates for any of the reasons in this section should be completed, submitted to omb, and',
34964:'included in the current years financial statements, on a timely basis.17 if omb has approved a plan that permits an',
34965:'agency to make technical reestimates less often than annually, written documentation of the plan and ombs approval should be obtained.',
34966:'if a technical reestimate isnot made in aparticular year, documentation should explain whythat is consistent with the approved plan and',
34967:'provide assurance in the ways specified above that the lack of a technical reestimate would not have a material financial',
34968:'statement impact.18 17 fair presentation of subsidy estimates in the financial statements may differ from estimates in the budget. 18',
34969:'omb has established a fourstep process, outlined in omb circulara11, that allows for calculating budgetary technical reestimates for the budget',
34970:'at times other than the beginning of each fiscal year following the year in which the initial disbursement was made,',
34971:'as long as the loans are outstanding subject to omb approval. however, this does not allow agencies to omit material',
34972:'reestimates from the current year financial statements or to postpone including material technical reestimates in the financial statements until a',
34973:'subsequent year. conversely, the omb process may require agencies to make technical reestimates for the budget that are not material',
34974:'to the financial statements. page 19 technical release 6 fasab handbook, version 20 06/21 technical release 6 57. reestimates submitted',
34975:'by the budget office to omb should be recorded in the accounting records. theagencyshouldhaveanaudittrailfromindividualtransactionstothesubsidiary ledgers to the general ledger. this',
34976:'will ensure that cash transactions can be identified by type so that they may be identified by subsidy expense component.',
34977:'sffas no. 18 states: “reporting entities… should disclose for each program …the subsidy reestimates by components as defined in paragraph',
34978:'32 [sffas no. 2] for those years [current reporting year and the preceding reporting year].” 58. if the cause of',
34979:'the reestimate affectsthe cash flows of future cohorts, the assumptions used to produce cash flow estimates and/or the method of',
34980:'estimating cash flows should be revised appropriately for the budget estimates of future cohorts. the provisions of thistechnical release need',
34981:'not be applied to immaterial items. page 20 technical release 6 fasab handbook, version 20 06/21 technical release 6 appendixa:',
34982:'technical glossary allowance for subsidy see direct loan subsidy allowance account definition. assumptions basic beliefs about the future operating and',
34983:'functional characteristics of the loan or group of loans or loan guarantees. types of assumptions include: cash flow assumptions all',
34984:'known and/or forecasted information about the characteristics and performanceofaloanor groupofloansorloanguarantees. examplesincludeestimatesof loan maturity, borrower interest rate, default/delinquency rate, timing of',
34985:'defaults, overall impact of changes in economic factors, etc. model assumptions determinationsofhow cashflowassumptionsareapplied throughthe life of the cohort. for example,',
34986:'determining whether the entire assumed amount of defaults should be applied in 1 year or whether a constant or variable',
34987:'proportion of the assumption value should be allocated to each year. the allocation of cash flows over time is the',
34988:'selected model form and is just as influential as the cash flow assumptions. case level each individual loan or guarantee',
34989:'within a cohort. cash flow stream the agencys projection of the dollar amount for the scheduled cash flows and deviations',
34990:'from scheduled cash flow items for each year over the life of the cohort. page 21 technical release 6 fasab',
34991:'handbook, version 20 06/21 technical release 6 cash flows estimatesof paymentsto orfrom the government over the life of a loan',
34992:'or group of loansor loan guarantees. for direct loans, these may include: loan disbursements, repayments of principal, payments of interest,',
34993:'and any other payments such as prepayments, fees, penalties, and other recoveries. for loan guarantees, these may include: payments by',
34994:'the government to cover defaults and delinquencies, interest subsidies, payments to the government, such as origination and other fees, penalties',
34995:'and recoveries, and any other payments. cohort all direct loans or loan guarantees of a program for which a subsidy',
34996:'appropriation is provided for a given fiscal year, even if disbursements occur in subsequent years. for direct loans and loan',
34997:'guarantees for which a subsidy appropriation is provided for one fiscal year, the cohort will be defined by that fiscal',
34998:'year. for direct loans and loan guarantees for which multiyear or noyear appropriations are provided, the cohort will be defined',
34999:'by the year of obligation. direct loan subsidy allowanceaccount the balance maintained in the general ledger that represents the difference',
35000:'between the current outstanding loans receivable balance and the present value of estimated cash outflows minus the present value of',
35001:'the estimated cash inflows over the remaining life of the direct loans. the subsidy allowance is subtracted from the loans',
35002:'receivable balance when calculating the net loans receivablebalance. asimilar account may also beusedfor defaultedguaranteedloans. econometrics the application of statistical methods',
35003:'to the estimation of economic relationships. financingaccount the nonbudgetary account or accounts associated with each credit program account that holds',
35004:'balances, receives the subsidy cost payment from the credit program account, and includes all other cash flows to and from',
35005:'the government resulting from post1991 direct loans or loan guarantees. each program account is associated with one or more financing',
35006:'accounts, page 22 technical release 6 fasab handbook, version 20 06/21 technical release 6 depending on whether the account makes',
35007:'both direct loans and loan guarantees separate financing accounts are required for direct loans and loan guarantees. fund an aggregation',
35008:'of programs into a common grouping consistent with how the congress provides appropriations i.e., the program and financing accounts together',
35009:'and, if needed, the negative subsidy receipt accounts. this term has other meanings in different contexts. inputs in the context',
35010:'of federal credit, cash flow data elements used to develop spreadsheet calculations. internal control an integral component of an organization’s',
35011:'management that provides reasonable assurance regarding the achievement of reliable financial reporting, effective and efficient operations, and compliance with applicable',
35012:'laws and regulations. internal control consists of the control environment,riskassessment,controlactivities, informationandcommunicationand monitoring. key assumptions assumptions that have been established, through',
35013:'sensitivity analysis or other means, to be the elements that have a large impact on estimates, and thus are the',
35014:'most important factors in determining the cost of a loan or group of loans or loan guarantees. liability for loan',
35015:'guarantees account the balance maintained in the generalledger that representsthe present value of estimated cash outflowsminus the present value of',
35016:'the estimated cash inflowsover the remaining life of the loan guarantees. page 23 technical release 6 fasab handbook, version 20',
35017:'06/21 technical release 6 liquidating account the budget account that includes all cash flows to and from the government resulting',
35018:'from pre1992 direct loans or loan guarantees, unless they have been modified and transferred to a financing account. negative subsidy',
35019:'receipt account the budget account for the receipt of amounts paid from the financing account when there is a negative',
35020:'subsidy cost for the original estimate or a downward reestimate. for mandatory programs, negative subsidiesanddownwardreestimatesmaybecrediteddirectlytothe program account as offsetting collections',
35021:'from nonfederal sources. omb credit subsidy calculator computer software developed by omb for discounting cash flows in estimating credit subsidies.',
35022:'it uses agency cash flow inputs to compute the net present value at the point of disbursement and the subsidy',
35023:'rate associated with those cash flows. program in the context of federal credit, an aggregation of cohorts which are linked',
35024:'by common terms, conditions, regulations, and/or mission goals; often a subdivision of a fund or the budgetary financing account. programaccount',
35025:'the budget account into which an appropriation to cover the subsidy cost of a direct loan or loan guarantee program',
35026:'is made and from which such cost is disbursed to the financing account. program accounts usually receive a separate appropriation',
35027:'for administrative expenses. risk category subdivisions of a cohort of direct loans or loan guarantees into groups of loans that',
35028:'are relatively homogeneous in cost, given the facts known at the time of obligation or commitment. risk page 24 technical',
35029:'release 6 fasab handbook, version 20 06/21 technical release 6 categories will group all loans obligated or committed for a',
35030:'program during the fiscal year that share characteristics predictive of defaults or other costs. all cohort level guidance in this',
35031:'technical release also applies to risk categories when they are used. service or line of business an aggregation of funds',
35032:'into a common grouping: for example, grouping funds into single family or multifamily designations. the following example is provided to',
35033:'illustrate the relationship the above terms have to each other and show how they may be aggregated for financial statement',
35034:'purposes. agencies should consult applicable omb guidance to determine what level of aggregation is most appropriate and acceptable. page 25',
35035:'technical release 6 fasab handbook, version 20 06/21 technical release 6 businesslineor service: farmserviceagency fund: a. ccc export guarantees b.',
35036:'agricultural credit insurance fund program: b1. farm ownership loans b2. farm operating loans, subsidized b3. farm operating loans, unsubsidized cohort:',
35037:'b3a. fy 1992 farm operating loans, unsubsidized b3b. fy 1993 farm operating loans, unsubsidized b3c. fy 1994 farm operating loans,',
35038:'unsubsidized b3d. fy 1995 farm operating loans, unsubsidized b3e. fy 1996 farm operating loans, unsubsidized risk category: b3e1. fy 1996',
35039:'farm operating loans, unsubsidized, southwest region b3e2. fy 1996 farm operating loans, unsubsidized, northeast region case: b3ai fiscal year 1992',
35040:'unsubsidized loan to farmera b3aii fiscal year 1992 unsubsidized loan to farmer b page 26 technical release 6 fasab handbook,',
35041:'version 20 06/21 technical release 6 appendix b: summary of selected reporting requirements19 principal statements credit reform information presented balance',
35042:'sheet credit program receivables and related foreclosed property, net of related subsidy allowance liabilities for loan guarantees statement of net',
35043:'cost subsidy expense will be included as part of the gross program costs present value of fees will be included',
35044:'as an offset in calculating subsidy expense rather than recording actual collection of fees as revenue interest revenue and interest',
35045:'expense statement of changes in appropriations received subsidy and appropriations used net position statement ofbudgetary appropriationsreceivedsubsidy,borrowingauthority,offsettingcollectionsexamples: resources collection of fees,',
35046:'principal, interest, subsidy from program account and obligations subsidy to financing account, direct loans, interest supplements, default claims and offsetting',
35047:'receipts example: negative subsidy or downward reestimate received by general fund receipt account statement of financing reconcile net obligations to',
35048:'net cost using components from the statements of budgetaryresources,changesinnetpositionandnetcost. examplesofreconciling items include upward/downward reestimates of subsidy expense, offsetting collections pertaining',
35049:'to fees and obligations 19 refer to fasab standardsfor acompletelistingofaccountingandreportingrequirements. therequirementsinthe standards may be supplemented by guidance provided in omb',
35050:'bulletin 0109 and omb circulara11. page 27 technical release 6 fasab handbook, version 20 06/21 technical release 6 note disclosures',
35051:'credit reform information presented directloansanddefaultedguaranteedloansby program or fund presentation by program or fund required by omb bulletin 0109. comparative data',
35052:'current and prior years for note disclosures required by omb bulletin 0109. sffas no. 18 requires the reconciliation of the',
35053:'subsidy cost allowance for direct loans and not defaulted guaranteed loans. by program or fund: loans receivable gross, interest receivable,',
35054:'foreclosed property, allowance for subsidy cost present value, and net value of assets related to direct loan programs and loan',
35055:'guarantee programs total amount of loans disbursed for current and prior years reconciliation between thebeginningand endingbalanceofthe subsidy cost allowance at',
35056:'the reporting entity level guaranteed loans by program or fund presentation by program or fund required by omb bulletin 0109.',
35057:'comparative data current and prior years for note disclosures required by omb bulletin 0109. by program or fund: present value',
35058:'of post1991 liabilities for loan guarantees face value of guaranteed loans outstanding, amount of outstanding principal guaranteed reconciliation between thebeginningand',
35059:'endingbalanceofthe loan guarantee liability at the reporting entity level both direct loans and defaulted guaranteed loans and guaranteed loans by',
35060:'programor fund presentation by program or fund required by omb bulletin 0109. comparative data current and prior years for note',
35061:'disclosures required by omb bulletin 0109. by program or fund: total subsidy expense, and its components total subsidy expense for',
35062:'modifications total subsidy expense for reestimates, and their components, for current and prior year interest and technical subsidy rates for',
35063:'the total subsidy cost, and its components, for the current year total administrative expense description of the characteristics of loan',
35064:'programs discussion of events and changes in economic conditions, other risk factors, legislation, credit policies and subsidy estimation methodologies and',
35065:'assumptions that have a significant and measurable effect on subsidy rates, subsidy expense and subsidy reestimates nature of the modification',
35066:'of direct loans or loan guarantees, discount rate used to calculate the modification expense, and basis for recognizing a gain',
35067:'or loss relating to the modification. restrictions on the use/disposal of foreclosed property, number of properties held and average holding',
35068:'period by type or category, number of properties for which foreclosure proceedings are in process and changes from prior year’s',
35069:'accounting methods page 28 technical release 6 fasab handbook, version 20 06/21 federal financialaccounting andauditing technical release 7: clarification of',
35070:'standards relating to the nationalaeronautics and spaceadministration’s space exploration equipment status issued effective date affects affected by may 25, 2007',
35071:'immediately none. none. summary the purpose of thistechnicalrelease istoprovide technical guidance to the nationalaeronautics and spaceadministration nasa regarding the accounting',
35072:'treatment of nasa’s space exploration equipment for financial reporting purposes. at issue is whether it is permissible to treat the',
35073:'acquisition ordevelopment costsof anyof thisequipment as research anddevelopment costs. the objective of thistechnicalrelease istoprovide guidance to nasaon the applicationof the',
35074:'current fasab standards. page 1 technical release 7 fasab handbook, version 20 06/21 technical release 7 table of contents page',
35075:'summary 1 scope 4 effective date 4 technical guidance 7 appendixa: basisforconclusions 10 page 2 technical release 7 fasab handbook,',
35076:'version 20 06/21 technical release 7 abbreviations aapc accountingandauditingpolicycommittee aicpa americaninstituteofcertifiedpublicaccountants cfo chief financial officer dod department of defense fas',
35077:'financialaccountingstandard fasab federalaccountingstandardsadvisoryboard fasb financialaccountingstandardsboard gaap generallyacceptedaccountingprinciples nasa nationalaeronautics andspaceadministration nd national defense omb office of management and budget pp&e',
35078:'property, plant, and equipment r&d research & development rtd&e research, testing, development, and evaluation sffac statement offederalfinancialaccountingconcepts sffas statement offederalfinancialaccountingstandards',
35079:'sig staff implementation guidance tr technical release page 3 technical release 7 fasab handbook, version 20 06/21 technical release 7',
35080:'introduction purpose 1. the purpose of this technical release is to provide technical guidance to the national aeronautics and spaceadministration',
35081:'nasa regarding the accounting treatment of nasa’s space exploration equipment for financial reporting purposes. at issue is whether it is',
35082:'permissible to treat the acquisition or development costs of any of this equipment as research and development costs. three specific',
35083:'questions were posed to theaapc by nasain reference to the issue. the objective of this technical release is to provide',
35084:'guidance to nasaon the application of the current fasab standards. scope 2. this technical release guidance is limited to transactions',
35085:'involving nasa’s space exploration equipment. however, the guidance related to the application of the generally acceptedaccounting principles gaap hierarchy applies',
35086:'broadly to all federal entities. 3. readers of this technical release should first refer to the hierarchy of accounting standards',
35087:'in statement onauditing standardssas91, federal gaaporseeau411. thistechnical release supplementsthe relevant accounting standards, but is not a substitute for and does',
35088:'not take precedence over the standards. effective date 4. this technical release is effective immediately. page 4 technical release 7',
35089:'fasab handbook, version 20 06/21 technical release 7 background overview 5. on july12,2006,nasawrotetotheaapc requestingguidancefor theaccounting treatment of the nationalaeronautics and',
35090:'spaceadministration nasa space exploration equipment. with a series of changes to the accounting standards governing space exploration equipment, including the',
35091:'reclassification of federal mission property in sffas 23 eliminating the category national defense property, plant, and equipment,nasafound existing guidance unclear',
35092:'regarding the accounting classification of space exploration equipment. this resulted in inconsistent and sometimes contradictory opinions from nasa’s auditors. 6.',
35093:'in theletter totheaapc,nasaposedthreequestionsthatitdeemedcentraltoresolving the ambiguity in the existing federalaccounting standardsadvisory board fasab standards. these questions are as follows: 1. doesthehierarchy',
35094:'of accountingprinciples for federal entitiespermitnasatoapply the sfas 2, in determining whether space exploration equipment should be expensed as a period',
35095:'expense? 2. can space exploration equipment that does not meet the criteria for general property, plant & equipment pp&e as',
35096:'defined in the fasab statement of federal financial accounting standards sffas 6, accounting for property, plant and equipment, be treated',
35097:'as a period expense? 3. does sffas 6 currently limit all items previously categorized as “space exploration equipment” to general',
35098:'pp&e? 7. theaapcformeda taskforceto addressnasa’s questionsandagreedto providea technical release to guide nasain the implementation of the standards. relatedaccounting literature 8.',
35099:'in its original form, sffas 6 defined federal mission pp&e to include space exploration equipment and required that it be',
35100:'expensed. subsequently, sffas 11 amended sffas 6, changing the classification of space exploration equipment to general pp&e and required page',
35101:'5 technical release 7 fasab handbook, version 20 06/21 technical release 7 that it be capitalized. most recently, in may',
35102:'2003, sffas 23 rescinded sffas 11 and modified sffas 6. the related accounting literature are as follows: federal accounting standardsadvisory',
35103:'board accounting standards: a. sffas 6, accounting for property, plant, and equipment b. sffas 8, supplementary stewardship reporting c. sffas',
35104:'11, amendments to accounting for property, plant, and equipment d. sffas 23, eliminating the category national defense property, plant and',
35105:'equipment e. staff implementation guidance sig 23.1, guidance for implementation of sffas 23, eliminating the category national defense property, plant,',
35106:'and equipment financial accounting standards board accounting standards: f. sfac 6, elements of financial statements g. sfas 2, accounting for',
35107:'research and development costs page 6 technical release 7 fasab handbook, version 20 06/21 technical release 7 technical guidance 9.',
35108:'this guidanceispresented as responses tothethreequestionsposedbynasatothe aapc, with questions two and three combined. 10. doesthehierarchyofaccounting principlesforfederalentitiespermitnasato apply the sfas 2, accounting',
35109:'for research and development costs, in determining whether space exploration equipment should be expensed as a period expense? 11. yes.',
35110:'theamericaninstituteofcertifiedpublicaccountants aicpastatementonauditing standards number 91, the meaning of present fairly in conformity with generally accepted accounting principles,integratedintoaicpaprofessional standards,au 411.15 provides',
35111:'that “in the absence of a pronouncement covered by rule 203 or another source of established accounting principles, the auditor',
35112:'of financial statements of a federal government entity may consider other accounting literature, depending on its relevance in the circumstances.”',
35113:'other accounting literature includes the fasb statements of financial accounting standards and interpretations. 12. sffas 8 addresses accounting for research',
35114:'and development costs. sffas 8 provides that “expensesincluded in calculating net cost for research and development programsthat are intended to',
35115:'increase or maintain national economic productive capacity or yield other future benefits be reported as investments in research and development',
35116:'in required supplementary stewardship information accompanying the financial statements of the federal government and its component units.” sffas 8, however,',
35117:'does not define “expenses” inthe contextof calculatingthenet costofresearchanddevelopmentprograms. nor do other fasab standards specifically address recognition of research and development',
35118:'costs or the elements of costs that would be identified with research and development activities. however, sffas 23 acknowledges that',
35119:'the board considered concernsabout the treatment of the costsof research, testing, development, and evaluation rtd&e for the department of defense',
35120:'but decided that issues related to these costs can and should be addressed in the context of existing basic principles',
35121:'and practices. thus, preparers have in turn looked to other authoritative literature for guidance. 13. sfas 2 describes activities that',
35122:'typically would be included in and the elements of costs to be identifiedwith researchand development. other federalagencieshaveturnedto sfas 2 for',
35123:'needed authoritative guidance. specifically, sfas 2 provides that the costs of materials, equipment or facilities acquired or constructed for a',
35124:'particular research and development project and that have no alternative future uses are treated as research and development costs in',
35125:'the period. page 7 technical release 7 fasab handbook, version 20 06/21 technical release 7 14. while sffas 8 is',
35126:'the principal authoritative source on accounting for research and development costs by federal agencies, this standard may be supplemented in',
35127:'order to address some of the differing research and development efforts by federal agencies. accordingly, consistent with the provisionsofau 411.15,',
35128:'federal agencies may consider the provisions of sffas 8 together with the provisions of sfas 2 in making a determination',
35129:'about accounting for research and development costs. 15. can spaceexploration equipmentthatdoesnotmeetthecriteriaforgeneralpp&eas defined in the sffas 6 be treated as a',
35130:'period expense? does sffas 6 currently limit allitemspreviouslycategorized as“spaceexploration property”asgeneralpp&e? 16. thecriteriafordeterminingwhetheranitemiscapitalizedaspp&eareoutlinedinsffas6, paragraph 17. the typical characteristics of general pp&e',
35131:'are outlined in sffas 6, paragraph 23. 17. in its original form, sffas 6 defined federal mission pp&e to include',
35132:'“space exploration equipment” and required that it be expensed. subsequently, sffas 11 amended sffas 6 to redefine “federal mission pp&e”',
35133:'as “national defense property, plant and equipment.” sffas 11 also included explanatory language which specified that space exploration equipment was',
35134:'to be accounted for as general pp&e. most recently, in may 2003, sffas 23 rescinded sffas 11 in its entirety',
35135:'and modified sffas 6 to require that national defense property, plant and equipment be capitalized as general property, plant, and',
35136:'equipment. werealizethatthesechangescouldhavecausedsomepreparersandauditors uncertainty regarding how to apply the resulting guidance in accounting for “space exploration equipment;” however, the hierarchy of',
35137:'accounting literature providesa meansto access literature to be relied on in determining an appropriate treatment. 18. sig 23.1, issued to',
35138:'clarify the intent of the fasab in its issuance of sffas 23, stated that, “assetsbeingrecognizedduetotheimplementationofsffas23shouldbecharacterizedin accordance with the asset definitions',
35139:'in sffas 6 and other accounting standards.” the genesis of the guidance was the narrow reading of the provision of',
35140:'sffas 23, which stated that …“the amendmentsin thisstatement… classifyall assetspreviouslyconsidered to be national defense property, plant, and equipment as general',
35141:'pp&e and the provisions for general pp&e … contained in sffas 6, as amended, are to be applied.” the essence',
35142:'of the guidance was to point out that the fasab’s intent was to have preparers follow existing standards in the',
35143:'classification of assets. it was not the fasab’s intent to require that preparers follow sffas 6 without regard to the',
35144:'nature of the underlying asset. accordingly, the concept discussed in sig 23.1 should be applied, i.e., the definitions included in',
35145:'the accounting standards may be used to determine the classification and treatment of “space exploration equipment” and not limited to',
35146:'the categoryof general pp&e, but be categorized in accordance with the definitions of sffas 6 and other accounting standards. page',
35147:'8 technical release 7 fasab handbook, version 20 06/21 technical release 7 19. the fasab standards in and of themselves',
35148:'do not preclude the expensing of space exploration equipment; as stated, the characteristics of the transactions or events should govern',
35149:'accounting treatment. the provisions of thistechnical release need not be applied to immaterial items. page 9 technical release 7 fasab',
35150:'handbook, version 20 06/21 technical release 7 appendixa: basis for conclusions a1. nasa’s request for guidance is based their need',
35151:'for clarification on the specific accounting guidance on the classification of space exploration equipment. the need for clarification is based',
35152:'on the many changes in the standards related to property, plant, and equipment. in 1995,sffas6 originallydefinedspace explorationequipment asfederalmission pp&e. in',
35153:'1998, fasab classified space exploration equipment as pp&e in sffas 11 and also replaced the definition of federal mission property',
35154:'with national defense nd pp&e. in 2003, sffas 23 rescinded sffas 11 in its entirety and reclassified nd pp&e as',
35155:'general pp&e. in addition to eliminating the category nd pp&e, this rescission purged the term “space exploration equipment”1 from the',
35156:'authoritative literature. a2. in 2004, the department of defense dod questioned whether the fasab actually intended to require that all',
35157:'items falling under the nd pp&e definition in sffas 23 be classified as general pp&e. dod submitted a discussion paper',
35158:'in july 2004 to the fasab staff. as a result, sig 23.1 was released. under this guidance, nd pp&e was',
35159:'not limited to the category of general pp&e. sig 23.1 states that “assets being recognized due to the implementation of',
35160:'sffas 23 should be categorized in accordance with asset definitions in sffas 6 and other accounting standards… any items not',
35161:'properly classified as general pp&e should be valued in a manner consistent with definitions in existing standards to determine the',
35162:'relevant asset class.” a3. the committee believes that nasa, in making determinations about the accounting treatment of transactions and events,',
35163:'should use its judgment in applying the standard that most appropriately reflects the characteristics of the transactions or events. one',
35164:'purpose of the hierarchy established in theaicpastatement onauditing standards 91 is to permit other accounting literature to be considered in',
35165:'the absence of specific guidance in the fasab standards. if it is determined that “space exploration equipment” meets the criteria',
35166:'forcapitalizationandhaspredominant characteristicsofproperty, plant andequipment,then theaccountingrequirementsinsffas6shouldbeapplied;howeverif thecostsincurredfor space exploration equipment are more similar to the r&d activities specified in sffas 8',
35167:'and sfas 2, then nasashould apply these standards to its space exploration equipment. the fasab standards in and of themselves',
35168:'do not preclude the expensing of space exploration equipment; as stated, the characteristics of the transactions or events should govern',
35169:'accounting treatment. nasa’s current accounting policy is to classify all theme assets as general pp&e and capitalize them. if it',
35170:'is determined that nasashould change 1 space exploration equipment included items intended to operate above the atmosphere for space exploration',
35171:'purposes, and any specially designed equipment to aid, service, or operate other equipment engaged in the exploration of space. see',
35172:'sffas 6, par. 52. page 10 technical release 7 fasab handbook, version 20 06/21 technical release 7 its current accounting',
35173:'policy, it should document that the accounting policy selected is preferable and the reasons therefore. a4. one comment letter was',
35174:'received from the following source: federal internal nonfederal external users, academics, others 0 1 auditors 0 0 preparers and financial',
35175:'managers 0 0 the one respondent agreed with the guidance as it was written and added the following comments. “the',
35176:'hierarchy of accounting standards provides for the use of fasb standards in this case. sfas 2 also covers the subject',
35177:'in sufficient detail to enable nasato apply it to its research and development costs.” page 11 technical release 7 fasab',
35178:'handbook, version 20 06/21 technical release 8: clarification of standards relating to interentity costs rescinded status issued february 20, 2008',
35179:'effective date immediately affects none. affected by tr 19 rescinded tr8 in its entirety. summary tr 19, recission of technical',
35180:'release 8 rescinded tr 8 in its entirety. page 1 technical release 8 fasab handbook, version 20 06/21 technical release',
35181:'9: implementation guide for statement of federal financialaccounting standards 29: heritageassets and stewardship land status issued february 20, 2008 effective',
35182:'date immediately affects none. affected by sffas 42. summary this technical release is intended to assist federal entities in reporting',
35183:'information on heritage assets ha and stewardship land sl in accordance with new federal accounting standards. federal entities are required',
35184:'to report descriptive, nonfinancial information on ha/sl as basic information in their financial reports, in accordance with statement of federal',
35185:'financial accounting standards sffas 29, heritage assets and stewardship land. page 1 technical release 9 fasab handbook, version 20 06/21',
35186:'technical release 9 table of contents page summary 1 scope 5 effective date 5 section i. materiality considerations 7 section',
35187:'ii. identification, categorization, and quantification 11 section iii. assessing and reporting condition 28 section iv: governmentwide reporting 36 appendixa: basis',
35188:'for conclusions 37 appendix b: excerpts from sffas 29 heritageassets and stewardship land 39 appendix c: illustrative disclosures 40 appendix',
35189:'d: glossary 45 page 2 technical release 9 fasab handbook, version 20 06/21 technical release 9 acronyms aapc accounting andauditingpolicycommittee',
35190:'aicpa americaninstituteofcertifiedpublicaccountants aga associationofgovernmentaccountants at codificationofstatementsonstandardsforattestationengagements au codificationofstatementsonauditingstandards cfr consolidated financial report of the u.s. government cfo chief financial officer',
35191:'cpa certifiedpublicaccountant ed fasab published the exposure draft fam u.s. governmentaccountabilityofficefinancialauditmanual fasb financialaccountingstandardsboard fasab federalaccountingstandardsadvisoryboard fmfia federalmanagers financialintegrityact gao u.s.',
35192:'governmentaccountabilityoffice gasb governmentalaccountingstandards board jfmip joint financial management improvement program omb office of management and budget oig office of inspector',
35193:'general pp&e property, plant and equipment rsi required supplementary information rssi required supplementary stewardship information sffac statement offederalfinancialaccountingconcepts sffas statement',
35194:'offederalfinancialaccountingstandards snc statement of net cost ha heritageassets sl stewardship land page 3 technical release 9 fasab handbook, version 20',
35195:'06/21 technical release 9 introduction purpose 1. this technical release is intended to assist federal entities in reporting information on',
35196:'heritage assets ha and stewardship land sl in accordance with new federal accounting standards. thistechnicalreleasesupplementsrelevantfederalaccountingstandards,butis not a substitute for and',
35197:'does not take precedence over the accounting standards issued by fasab. 2. federal entities are required to report descriptive, nonfinancial',
35198:'information on ha/sl as basic information in their financial reports, in accordance with statement of federal financialaccounting standards sffas 29,',
35199:'heritage assets and stewardship land. 3. prior to issuing sffas 29, information on ha/sl was reported as required supplementary stewardship',
35200:'information rssi. sffas 29 reclassifies all ha/slinformation as basic financial information, except for condition information, which is reclassified as required',
35201:'supplementary information rsi and may be reported with deferred maintenance information. the standard also requires that entities reference a note',
35202:'on the balance sheet that discloses information about ha/sl, but no asset dollar amount should be shown. instead, the minimum',
35203:'reporting requirements for note disclosure include a description of major categories, physical unit information for the end of the reporting',
35204:'period, physical units added and withdrawn during the period, and a description of the methodsof acquisition and withdrawal. 4. sffas',
35205:'29 also requires two new disclosures for ha/sl: entity stewardship policies and an explanation of how ha/slrelate to the mission',
35206:'of the entity. the standard also includes the requirements for the consolidated financial report of the u.s. government cfr. the',
35207:'cfr provides for a general discussion and directs users to the applicable entities’ financial statements for more detailed information on',
35208:'ha/sl. this technical release focuses specifically on ha/sl. it does not address other types of property, plant, and equipment pp&e.',
35209:'5. this technical release is organized into four sections: section i materiality considerations describes an approach for considering materiality that',
35210:'is common to entities as they apply the materiality concept to ha/sl. it includes qualitative factors to consider in making',
35211:'materiality judgments about ha/sl. section ii identification, categorization, and quantification discusses issues related to identifying ha/sland describes how the standard',
35212:'allows entities flexibility in page 4 technical release 9 fasab handbook, version 20 06/21 technical release 9 determining the format',
35213:'and level of detail to report relevant and reliable information in note disclosures. it also explores factors affecting the level',
35214:'of detail such as management’s selection of categories for reporting and choice of physical units within categories, as portrayed in',
35215:'various examples. in addition, a discussion of supporting documentation is included. section iii assessing and reporting condition discusses approaches for',
35216:'meeting condition reporting requirements for ha/sl. this section provides guidance for identifying criteria to assess condition, discusses sources of information',
35217:'to support reporting, and provides examples of reporting condition. section iv governmentwide reporting discusses the balance sheet note reference and',
35218:'a note disclosure of ha/slinformation in the u.s. governmentwide financial statement. scope 6. readers of this technical release should first',
35219:'refer to the hierarchy of accounting standards in statement onauditing standards sas 91, federal generallyacceptedaccounting principles hierarchy or seeau411. this',
35220:'technical release supplements the relevant accounting standards, but is not a substitute for and does not take precedence over the',
35221:'standards. effective date 7. theeffectivedateforimplementationofthetechnicalreleaseisforperiodsbeginningafter september 30, 2008. earlier implementation is encouraged. the provisions of thistechnical release need not be',
35222:'applied to immaterial items. background 8. fasabdeterminedthatinformationon haandslexceptfor condition shouldbebasic financialinformationbecause1informationontheseassetsisessentialtofairpresentation and understanding of the entity’s financial condition; 2 accountability',
35223:'for ha/sl requires moreaudit scrutinythanwouldbeaffordedif theseassetswereaddressedthroughrsi; and 3 this classification is consistent with existing standards issued by the governmental page',
35224:'5 technical release 9 fasab handbook, version 20 06/21 technical release 9 accounting standards board gasb for reporting on art',
35225:'and historical treasures, and financialaccounting standards board fasb for reporting on collections, other works of art, and historical treasures.1 reporting',
35226:'condition of ha/sl as rsi is appropriate because the information is experimental in nature and the manner of assessing and',
35227:'reporting this information is inconsistent.2 transition from rssi to basic/rsi information 9. thereclassificationfromrssitobasicfinancialinformationforha/slisbeingphasedinas required by sffas 29. the phasein approach',
35228:'requires full implementation of sffas 29 for reporting periods beginning after september 30, 2008. items a and b are new',
35229:'note disclosures and are to be reported as basic financial information beginning in periods after september 30, 2005; items c',
35230:'through f temporarily move to rsi in periods after september 30, 2005 before being reported as basic financial information. a.',
35231:'astatement explaining how ha/slrelate to the mission of the entity b. adescription of the entity’s stewardship policies c. adescription of',
35232:'major categories d. physical unit information for the end of the reporting period e. physical units added and withdrawn during',
35233:'the year f. adescription of the methods of acquisition and withdrawal 10. effective dates for transitioning the above ha/sl information',
35234:'from rsi to basic financial information i.e., a note disclosure to the financial statements begin for periods:3 after september 30,',
35235:'2007 for items c and d, after september 30, 2008 for items e and f. 1 sffas 29, par. 54.',
35236:'2 sffas 29, par. 57. 3 see sffas 29 for details on the phasein of disclosure requirements being reported as',
35237:'basic information. page 6 technical release 9 fasab handbook, version 20 06/21 technical release 9 section i. materiality considerations 11.',
35238:'in the interest of meaningful and cost effective information, managers of ha/sl information need to understand and apply the concept',
35239:'of materiality in order to decide what is material and what is not. key issues are 1 what is the',
35240:'appropriate level of detail and aggregation for reporting ha/slinformation and 2 how should materiality be applied to assets that are',
35241:'not reported in dollar amounts? 12. in developing the entity’s disclosures, management should identify meaningful levels of aggregation by determining',
35242:'whether assets are material enough to warrant classification in separate categories. regardless of the level of detail or aggregation, the',
35243:'entity should support its financial statements with internal accounting policies listing the chosen criteria and methods of aggregation and classification.',
35244:'13. materiality has both quantitative and qualitative characteristics. traditional materiality judgments about financial information are primarily quantitative and are focused',
35245:'on dollar amounts. however,thefactthatha/slarenotreportedindollarsrequiresspecialattention to qualitativefactorssuchasthenature oftherelatedassetsandthecircumstancesinwhich the materiality judgment is made. 14. management’s consideration of materiality is a matter',
35246:'of professional judgment and is influenced by 1the information necessary to demonstrate accountability for ha/sl, 2 the needs of a',
35247:'reasonable person who will rely on the principal financial statements, and 3 costbenefit justifications. this approach incorporates two fundamental values',
35248:'of federal financial reporting: accountability and decision usefulness. accountability and decision usefulness 15. as the standardsetting body for the federal',
35249:'government, fasab stated that there are two fundamental values that provide the foundation for governmental accounting and financial reporting: “accountability”',
35250:'and its corollary, “decision usefulness.”4 fasab explained that “because a democratic government should be accountable for its integrity, performance, and',
35251:'stewardship, it follows that the government must provide information useful to assess that accountability.” 4statement of federal financialaccounting concepts sffac',
35252:'1, objectives of federal financial reporting, par. 71. page 7 technical release 9 fasab handbook, version 20 06/21 technical release',
35253:'9 16. under an “accountability concept” of materiality, management uses its professional judgment to decide, on behalf of users, what',
35254:'information is needed to demonstrate accountability over ha/sl in accordance with federal accounting concepts and standards. materiality is then evaluated',
35255:'in relation to the information considered necessary for accountability. in essence, the accountability concept of materiality considers the information needed',
35256:'to answer such questions as, are the assets important to the entity’s missionortothenation? aretheassetshighlyvisible,vulnerable,orcontroversial?and,is the government effectively managing and safeguarding',
35257:'assets?5 17. traditionaldefinitionsofmaterialityforfinancialinformationcenteron “decisionusefulness,” a concept that relates to the needs of a reasonable person who relies on reported information',
35258:'to make decisions. the focus on decision usefulness originated from the primary objective of financial reporting for business enterprises established',
35259:'by fasb: “financial reporting should provide information that is useful to present and potential investors and creditors and other users',
35260:'making rational investment, credit, and similar decisions.”6 18. however,inthefederalgovernment,theha/slinformationthatusersneedinordertomake informed decisions is evolving since agencies are still in the early',
35261:'stages of reporting. users’needswilllikelybecome moreclearlyidentified as the required disclosuresare made availableandattractuserswhorelyonitformakingdecisions.7 inthemeantime,attempting to make materiality determinations about ha/slinformation based solely',
35262:'on undetermined user needs i.e., decision usefulness is an uncertain approach. therefore, for ha/sl, the current focus for considering materiality',
35263:'should be based on accountability. citizens want assurances that the ha/slentrusted to the government are protected and used for the',
35264:'purposesintended.8 congress,executives,andprogrammanagersneedtodemonstrateto those to whom they are accountable that they have, in fact, protected those resources and used them well.',
35265:'5 sffac 1, par. 105 states, “the federal government derives its just powers from the consent of the governed. it',
35266:'therefore has a special responsibility to report on its actions and the results of those actions. …providing this information to',
35267:'the public, the news media, and elected officials is an essential part of accountability in government.” 6 source: fasb’s statement',
35268:'of financial concepts no. 1: objectives of financial reporting by business enterprises, par. 34. 7 see sffac 1, par. 7587;',
35269:'sffac 4, par. 69; and sffas 6, basis for conclusions, par. 123 for a summary of the users of federal',
35270:'financial reports and their stewardship information needs. 8 “citizens” include individual citizens as well as citizen intermediaries i.e., the general',
35271:'news media and more specialized users such as trade journals; public interest and advocacy groups; state and local legislators and',
35272:'executives; and analysts from corporations, academe, and elsewhere. according to sffac 1, par. 76 and sffac 4 par. 7, “citizen',
35273:'intermediaries devote more time to reading, analyzing and interpreting more detailed information that they analyze, summarize and pass on to',
35274:'citizens for further application.” sffac 4, par. 16 page 8 technical release 9 fasab handbook, version 20 06/21 technical release',
35275:'9 measurement issues 19. for the federal government ha/sl, there is no unifying theme upon which to base quantitative measuresofmateriality,suchas,totalassetsortotalexpensesbecausethereis',
35276:'no common unit of measure, such as dollars, that can be used to evaluate the effect of omissions and misstatements',
35277:'among ha/sl categories. in other words, ha/sl management’sfocusison whetherin the aggregate the categoriesreported forha/slarea completepresentationofha/slfor whichtheentityisaccountable. for example, management might',
35278:'report quantities for five separate and dissimilar categories of hasuch as 6,000 linear feet of archival documents, 4,000 cubic feet',
35279:'of archeological artifacts, 2,500 paleontological items, 1,000 pieces of artwork, and 500 geological specimens. these diverse categories have different measurement',
35280:'attributes that are not readily quantifiable in monetary units. 20. therefore, each entity should identify and apply the qualitative factors',
35281:'that will govern their ha/slnotedisclosure. choosingqualitativematerialityfactorsisapractical means to achieve straightforward and consistent reporting procedures for stewardship assets. the intent is',
35282:'that management should do what is reasonable to report information about the entity’s ha/slyet avoid costly and burdensome reporting of',
35283:'unnecessary detail. qualitative factors to consider 21. reporting information about ha/sl should reflect the entity’s stewardship processes and responsibilities for',
35284:'managing stewardship assets. such reporting can be accomplished, in part, by analyzing the entity’s mission as part of determining which',
35285:'asset categories are material and warrant separate classification and presentation. as mentioned previously, factors to be considered, among others, are',
35286:'whether the asset categories are viewed as “important to the nation” or to the mission of the entity, and whether',
35287:'the assets are “visible, vulnerable, or controversial.” other factors to consider include whether the entity has significant operations, programs or',
35288:'activities related to the management of the ha/sl. additionally, consideration should be given to whether ha/slhave characteristics or qualities that',
35289:'have widespread public interest. financial presentation, disclosure and meaningfulaggregation 22. inherent in preparing financial statements in conformity with gaap, management',
35290:'makes financial reporting assertions about ha/sl, generally in five broad categories: existence, completeness,rightsandobligations,valuation,andpresentationanddisclosure. asstated in the basis for conclusions section',
35291:'of sffas 29, “ the board believes that the agencies page 9 technical release 9 fasab handbook, version 20 06/21',
35292:'technical release 9 are in the best position to determine the most meaningful level of presentation. the board believes that',
35293:'ultimately the presentation depends upon the specifics of the entity – its mission, the types of ha, how it manages',
35294:'and materiality considerations.” 9 23. as supported by the basis for conclusions for sffas 29,10 management must differentiate between a',
35295:'detailedrecordsthat maybeneededformanagement controlandsafeguarding purposes, and b presentations that are material for stewardship note disclosures. entities may track individual assets and',
35296:'asset categories for control purposes that do not warrant separate presentation in their stewardship note disclosures. for example, under the',
35297:'real property initiative of the president’s managementagenda, agencies are required to record information about assets in the federal real property',
35298:'profile database. this information is viewed as an asset manager’s tool and may provide estimates on a large scale to',
35299:'generally depict the government’s assets. 24. management’s consideration of materiality should focus on identifying meaningful levels of aggregation for reporting;',
35300:'i.e., determining which ha/sl warrant classification and presentation in separate categories. for example, are the assets unique, especially important and',
35301:'of exceptional interest? 25. inordertomeetthereportingobjectivesofsffas29,consistentwiththefinancialreporting assertions, and with a focus on meaningful aggregation, management should analyze the entity’s ha/sl: for',
35302:'significant ha/sl that are considered meaningful for aggregation, establish separate categories and disclose the number of physical units11 in each',
35303:'category. if immaterial “entities may omit heritage asset and sl information.”12 26. in summary, the agency is in the best',
35304:'position to determine the appropriate level of fair presentation,aggregationand physicalunitsof measurefor presentingeach majorcategory based on the entitys mission, the types',
35305:'of ha/sl, and how it manages its assets. such determinations are highly subjective and require the use of professional judgment.',
35306:'9 sffas 29, basis for conclusions, par. 79. 10 sffas 29, basis for conclusions, par. 85. 11 “particularlyfor collectiontypeheritageassets, it',
35307:'may bemoreappropriatetodefine thephysical unit as a collection, or a group of assets located at one facility, and then count the',
35308:'number of collections or facilities.” sffas 29, footnote 10. 12 sffas 29, basis for conclusions, par. 101. page 10 technical',
35309:'release 9 fasab handbook, version 20 06/21 technical release 9 section ii. identification, categorization, and quantification 27. sffas 29 provides',
35310:'considerable latitude on identifying, categorizing, and quantifying footnote information on ha/sl. the board provides broad guidance, and allows flexibility for',
35311:'each entity to determine what constitutes relevant and reliable information for its individualha/sl.13 reportingrequirementsfor ha/slincludeacquisitions,withdrawals,and endingbalances expressedinphysical units. slphysical units',
35312:'arebymajor categories of use14 whereas haphysical units are by major category.15 ha/sl1 should be reported with a note reference on',
35313:'the balance sheet with no asset dollar amount shown and 2 costs associated with ha/slmust be recognized in the statement',
35314:'of net cost snc for the period in which the costs are incurred. also nonfinancial information on ha/sl including multi',
35315:'use ha must be reported in the note disclosure. 28. multiuseharequires additionaldescriptiveinformationintheheritageassetnote disclosure, with cross references directing the reader from',
35316:'the balance sheet to the note disclosure. multiusehaaretobe reportedinboththeprincipalfinancial statements in dollarsasgeneralpp&eandintheheritageassetnotedisclosureinphysicalunits.16 this reporting and note disclosure would not be',
35317:'considered duplicative as each category is considered unique for this reporting purpose. 29. additionally, agencies should document the identification, categorization,',
35318:'and quantification reasoning in their internal accounting policies and procedures to ensure the consistent reporting for all similar ha/sl. identification',
35319:'general issues 30. aprimaryissueinimplementingsffas29is determiningwhether landisslor general pp&e land; andwhether an asset isa heritageasset, a multiuse heritage asset, or general',
35320:'13 sffas 29, par. 79 – 85. 14 sffas 29, par. 40 d. 15 sffas 29, par. 25 d. 16',
35321:'sffas 29, par. 27 and 29. page 11 technical release 9 fasab handbook, version 20 06/21 technical release 9 pp&e.',
35322:'making each determination correctly is fundamental to accounting and reporting for ha/sl. 31. sffas29broadlycharacterizesha/slasgenerally expectedtobepreservedindefinitely. in addition to the definitions',
35323:'of ha/slcontained in the standard, ha/slare significant to the nation’s history and culture. being listed on the national register of',
35324:'historic places, althoughnotconsideredarequiredcriterionforidentifyingha,17 may indicatethattheasset is ha. other ways to identify ha/sl include specific designations set forth by authoritative bodies',
35325:'such as congress, the president, or an agency head as well as cultural protection laws, regulations, or other cultural asset',
35326:'protection standards.also, ha/sl may have characteristics or qualities that are of widespread public interest. 32. onceha/slhavebeenidentified,eachentitymustdeterminethemostappropriatelevelto reporttheseassetsforpurposesoftherequirednotedisclosure. thisreportingdependson the typesof',
35327:'ha/sl, the entity’s mission, materialityconsiderations, and the entity’s ability to classify such assets consistently from year to year. 33. the',
35328:'following ha, multiuse ha, and sl examples illustrate how some pp&e could be identified as haor sl. however, the examples',
35329:'are for illustrative purposes only and their disclosures are not mandatory. the examples are not allencompassing and agencies may identify',
35330:'other more useful and relevant criteria to identify ha/sl. appendix c provides examples of footnote disclosures. heritageassets heritage asset examples',
35331:'34. example 1: historic andprehistoricstructuresmaybeidentifiedas habecause historic structures are significant to the nation and are associated with the important people',
35332:'and history of the nation.18 they are constructed works consciously created to serve some human activity or purpose. these structures',
35333:'include buildings, monuments, dams, canals, stockades, fences, defensive works, temple mounds, kivas, ruins of all structural types, and outdoor sculptures.',
35334:'17sffas 29, par. 15 and 16. 18 an example of such a site is the u.s. doe nevada test site',
35335:'on which various archeological sites have been identified. most were left by the ancestors of the presentday indian tribes, paiutes',
35336:'and shoshones. these sites include rock shelters, brush houses, fire pits for cooking, and artifacts on ground surfaces. page 12',
35337:'technical release 9 fasab handbook, version 20 06/21 technical release 9 35. example 2: national historic landmarks possess exceptional value',
35338:'or quality in illustrating or interpreting the heritage of the united states in history, architecture, archeology, technology, and culture. they',
35339:'possess a superior location, design, setting, materials, and workmanship. they are districts, sites, buildings, structures, or objects of national significance',
35340:'possessing exceptionalvaluein commemorating orillustratingthe historyofthe unitedstates. the historic sitesact of 1935 authorizesthe secretaryof the interior to grant thisdesignationasthefederalgovernment’sofficialrecognitionof thenationalimportanceof historic',
35341:'properties. 36. example 3: aculturallandscapeis identified as ahabecauseofits naturalandcultural significance. acultural landscape is a geographic area, including both natural and',
35342:'cultural resources, associated with an historic event, activity, or person. these landscapes may contain trails, trees, waterways, or structures but',
35343:'are combined into one unit by their designation and collectively viewed as one ha. there are four general types of',
35344:'cultural landscapes: historic sites, historic designed landscapes, historic vernacular landscapes, and ethnographic landscapes.19 37. example 4: museum or librarycollections maybeidentified',
35345:'as habecausethey mayhave historical significance and/or cultural, educational or artistic importance. these collections compriseobjectsormaterialsthat havebeengathered andmaintainedforexhibitionoruse. these items could include',
35346:'exhibit pieces, artifacts, published materials, and/or other literary content in any format. 19 oneexampleof aculturallandscapeis fortbragg. thisculturallandscapeisuniquebecause ofitscontinueduse for defense',
35347:'related purposes and the influences to the landscape that result from defense related activities. another examplethatencompasses threeoverlappingculturallandscapes is thedepartmentofenergydoehanford site.',
35348:'the first landscape represents a rich archeological and ethnographic landscape that has existed for more than 10,000 years where localamerican',
35349:'indian tribes still revere the area for its spiritual and cultural importance, as they continue the traditions practiced by their',
35350:'ancestors. the second landscape embodies the experiences of the immigrants who started arriving in the mid19th century. following the explorers',
35351:'and fur traders who passed through the area were miners, ranchers, and then farmers. in 1943, the u.s. government acquired',
35352:'the land for a secret wartime project and approximately 1,500 families were forced to move. today, the former residents and',
35353:'their families recall the homes they had to leave and see the remains of their farms and towns as symbols',
35354:'of the sacrifice they made to the war effort. the third landscape is associated with world war ii and the',
35355:'subsequent cold war. the government acquired the land in 1943 to build large industrial facilities to produce plutonium, which served',
35356:'a vital role in the nations defense. hanfords mission expanded during the cold war era to include research and development',
35357:'activities associated with the peaceful uses of atomic energy. today, the remains of the facilities and legacy wastes document an',
35358:'important part of the nuclear age story. page 13 technical release 9 fasab handbook, version 20 06/21 technical release 9',
35359:'multiuse heritageassets 38. ahathatserves twopurposes, for example,aheritage function and agovernment operations function, should be considered a multiuse haand classified as',
35360:'general pp&e if the predominant use not the incidental use of the asset is in general government operations.20 entities should',
35361:'consider the predominant use of a hain determining the appropriate accounting treatment. multiuse heritageasset examples 39. example 1: assets in',
35362:'the nation’s capital that are currently identified as multiuse heritage assets include the department of the treasury and the governmentaccountability',
35363:'office gao buildings. the main treasury building is used predominately for agency operations but also has historical significance as evidenced',
35364:'by its national historic landmark status. the gao building qualifies as a multiuse heritage asset because it is listed in',
35365:'the national register of historic places, and it is being used in general government operations. 40. example 2: the hoover',
35366:'dam’s predominant use is an operational dam providing hydro power, recreation, and water supply. it is also a national historic',
35367:'landmark and a museum facility. therefore, it is considered a multiuse heritage asset. 41. example 3: asupervisor’s officeforanationalforestis identified as',
35368:'amultiuseheritage asset because it provides administrative office space for forest service personnel who manage operations of the forest. while its',
35369:'predominant use is for administrative office space, the office is also listed on the national register of historic places because',
35370:'of itsage and unique log architectural design. 42. examples 4 and 5 below describe assets that are not multiuse heritage',
35371:'assets because they do not meet the definition of haor are exempt from classification as multiuse ha. 43. example 4:',
35372:'the punta gorda lighthouse is an operational lighthouse that is capitalized andreflectedonthebalancesheet. eventhoughthelighthouseisacontributingpropertyto an historic site and has attributes that',
35373:'are considered historically valuable, these attributes are common to many other historic structures in the country. management has determined that',
35374:'the lighthouse is not a multiuse heritage asset, because according to the managing agency’s internally documented procedures for identifying heritage',
35375:'assets, the lighthouse does not meet the necessary level of historic significance for disclosure. 20 sffas 29, par. 18. page',
35376:'14 technical release 9 fasab handbook, version 20 06/21 technical release 9 44. example 5: the jefferson national expansion memorial',
35377:'st. louis, mo has incidental administrative offices and shop space located in the memorial. in this case, the memorial should',
35378:'be reported as a heritage asset. stewardship land 45. entities commonly classify land by using a twostep process. first by',
35379:'determining whether the land meets the criteria forgeneralpp&e land or sl. land is considered general pp&e if itis “acquiredfor or',
35380:'inconnection withitems ofgeneralpp&e.”21 slis landandlandrights owned bythe federal government but not acquired for orin connection with items of general pp&e.22',
35381:'46. if land meets the criteria for general pp&e, then determine if the land has an identifiable cost.23ifland does nothave',
35382:'an identifiable costor where costisnominal or insignificant, itis sl, regardless of whether it is acquired for or in connection with',
35383:'other general pp&e. the following chart provides implementing guidance for interpreting par. 25 of sffas 6 and par. 35 and',
35384:'36 of sffas 29. 21 sffas 6, par. 25. the phrase “acquired for or in connection with” is defined as',
35385:'including “land acquired with the intent to construct general pp&e and the land acquired in combination with general pp&e, including',
35386:'not only land used as the foundation, but also adjacent land considered to be the general pp&e’s common grounds,” according',
35387:'to sffas 29, footnote 16. 22 sffas 29, par. 33 and 36. 23 examples where land would have an unidentifiable,',
35388:'nominal, or insignificant cost would include federally owned lands that were part of the louisiana purchase in 1803 louisiana,arkansas, oklahoma,',
35389:'missouri, iowa, kansas, nebraska, south dakota, montana, andparts of minnesota, wyoming, and colorado, the gadsden purchase in 1853 parts ofarizona',
35390:'and new mexico, and the oregon territory whereamerican title was established in 1846 by the spanishamerican compromise washington, oregon, and',
35391:'part of idaho. these lands do not have an identifiable cost because the land was acquired at nominal cost in',
35392:'current dollar value or at no cost at all. these lands are part oftheoriginally constitutedamerica’s “public domain” land. much ofthis',
35393:'landis no longer under federal ownership. what remains under federal ownership today is generally referred to as the “public lands.”',
35394:'the concept of “identifiable cost” in determining whether land is stewardship land does not apply to situations where land logically',
35395:'would have an identifiable cost but that cost is unknown due to inadequate accounting, weak or no internal controls, or',
35396:'other imprudent actions. page 15 technical release 9 fasab handbook, version 20 06/21 technical release 9 purchase or obtain land',
35397:'y y used with general pp&e? see par. 45 sl identifiable or significant cost? see par. 46 n n general',
35398:'pp&e stewardship land examples 47. example 1: in order to establish a military base, testing ground, or firing range, an',
35399:'agency receives a transfer24 of federal land that was originally part of large territories of public domain land that the',
35400:'nation acquired at nominal cost. thispublic domain land, acquired by transfer from another federal entity, does not have an identifiable',
35401:'cost. therefore, this publicdomainlandissl,regardlessofhowtheagencyusesit. inthiscase,thelandwould be categorized and reported as slfor financial reporting purposes. 48. conversely, if land were purchased',
35402:'for or in connection with construction of a military base, testing ground, or firing range, it would have an identifiable',
35403:'cost and should be included in general pp&e. in this case, the land would be reported on the balance sheet',
35404:'with a dollar value along with other capital assets. 24 see sffas 29, par. 39 and 40.d. 3 for the',
35405:'discussion on sltransfers. page 16 technical release 9 fasab handbook, version 20 06/21 technical release 9 49. example 2: agency',
35406:'1 has been granted specific legislative authority to sell tracts of land that were originallypublic domain land currentlyclassified as sl',
35407:'to the publicand to retain a portion of the proceeds25 from those sales to purchase environmentally sensitive tracts of land',
35408:'from the public in locations prescribed by the enabling legislation. the purchased land may be retained and managed byagency 1',
35409:'or it may be transferred to another federal agency agency 2 for management of the sle.g., for use as wildlife',
35410:'habitat, forest production,or other sluse. atthepointwhen thesale andpurchasetransactionsoccur, thecost/valueofthelandsoldandpurchasedisknown. however,thisslisnotassociated with general pp&e and therefore is classified as sl. 50.',
35411:'in this example,agency1wouldreport areductioninthe quantity ofslreflectingthe disposalsaletransaction. whenlandis subsequentlypurchased,agency1wouldshow an increase in the quantity of sl reflecting the purchase transaction.',
35412:'if the purchased land is transferred toagency 2,agency 1 would show a reduction in the quantity of slreflecting thetransfertoagency2formanagement. agency2wouldreflectanincreaseinitsquantity',
35413:'of sl. no monetary amounts relating to land would be reported on the balance sheet. 51. when each agency develops',
35414:'its footnote disclosures, the actual increase or decrease in categories and/or physical units depends on how each agency in the',
35415:'example chooses to categorize andquantifyitssl. inthisexample,agency1hasa “multipleuse” category26 andquantifiesitslandbymanagementunit. assuch,ifamanagementunitwerereducedor increased in size but not eliminated or created, there would',
35416:'be no net change in its reporting. agency 2 has a major category of use of conserving, protecting, and enhancing',
35417:'fish and wildlife and their habitats. agency 2 quantifies its land by refuge. if the increase in land does not',
35418:'create a new refuge, thenagency 2 would also show no net change in its reporting. 52. example 3: an agency',
35419:'purchases land for $300,000 that is to be added to a wildlife refuge for wildlife habitat. in this example, the',
35420:'land has an identifiable cost, but it was not acquired for or in connection with general pp&e. therefore, it does',
35421:'not qualify as general pp&e land. thus,thelandis slandthe$300,000purchasepricewouldbeexpensedintheyear of acquisition.27 in this example, if the reporting unit wildlife refuge was',
35422:'increased in size, but theincreasedid not create anewrefuge, thenthe entitywouldshownonet changein its 25 generally speaking, federal agencies can sell and',
35423:'purchase land. however, without specific legislative authority, they cannot retain proceeds from the sales of land for any agency purpose.',
35424:'proceeds from the sale of land would normally be transferred to the general fund of the treasury. 26 an example',
35425:'of “multipleuse” land is when legislation requires the use of multiple natural resources i.e., domestic livestock grazing, fish and wildlife',
35426:'development, mineral exploration and production, rightsofway, outdoor recreation, and timber production related to the sland no single use is predominant.',
35427:'27 in accordance with sffas 29, par. 37. page 17 technical release 9 fasab handbook, version 20 06/21 technical release',
35428:'9 reporting related to sl units. however, if the agency reports by units, such as acreage, it would reflect an',
35429:'increase in units. categorization 53. sffas 29 emphasizes reporting on asset categories, rather than individual assets28 such that reporting should',
35430:'be by major category for haand major category of use for sl.29 moreover, entities should determine the appropriate level of',
35431:'detail for their categorization. related groups of assets that do not warrant classification and presentation in separate categories should be',
35432:'aggregated.30 general issues designation of categories 54. thedeterminationofwhichha/slwarrantpresentationinseparate categoriesisrelatedto whether they are material based on management’s judgment. as described in',
35433:'the section on materiality considerations,management’sconsideration of materialityforha/slfocuses on meaningful levels of aggregation for the stewardship note disclosures. establishing the level',
35434:'of reporting detail 55. theappropriateinformationforreportingha/slcanvaryfromoneentitytoanother,aswell as from a component entity to the consolidated entity. the level of detail of the',
35435:'information presented depends, in part, on the mission of the entity, the types of stewardship assets, how the entity manages',
35436:'the assets, and the materiality of the assets in question.31 for example, an agency with stewardship as its primary mission',
35437:'might choose to report more extensive and detailed categories than an agency that does not have a stewardship 28 sffas',
35438:'29, par. 25.c. and 40.c. 29 thephrase “majorcategoryoflanduse” isnotspecificallydefinedinsffas 29. however,basedonthedefinitionof landthe solidpart of the surfaceof the earth, onemight reasonably',
35439:'assume that the land functions as the foundation for natural resources and as a basin for water resources water being',
35440:'a natural resource. it is the natural resources that landmanagement agencies manage, and it is the resources for which they',
35441:'authorize use. hence, the phrase “major category of land use” can be implied to mean “major category of resource use.”',
35442:'30 aggregation of assets into categories could be compared to or likened to identifying “major classes” of assets. sffas 6',
35443:'provides examples of major classes for general pp&e in footnote 63. these include, among others, buildings and structures, furniture and',
35444:'fixtures, equipment, vehicles, and land. 31 see section on materiality considerations. page 18 technical release 9 fasab handbook, version 20',
35445:'06/21 technical release 9 mission. it is important to clarify that agencies may establish levels of detail for ha/sl and',
35446:'manage them for control purposes in a manner that is different from how they categorize and aggregate them for financial',
35447:'reporting purposes. 56. also,someha/slcategoriesoverlapbecausetheyaredefinedinwaysthatresultincertain assets,suchaslandscapemonuments,beingreportedasbothhaandsl. however,such reporting is not duplicative because the type of information reported for each category is',
35448:'different. for example, while a landscape monument might count as one item in the category of ha, the land supporting',
35449:'the monument could be included in the physical units under sl.32 the craters of the moon national monument and preserve',
35450:'might be reported as haand the vast expanse of land under the monument reported with the many tracts of land',
35451:'managed by the district. heritageassets 57. sffas2933 requires that entities categorize haby “majorcategory.” majorcategoriescan be defined in many ways such',
35452:'as: the characteristics or attributes that make them unique, e.g., historical, natural, cultural, educational, artistic, or architectural; designations of significance',
35453:'by experts or government leaders; the nature of the items such as collectible or noncollectible; structural or nonstructural; and asset',
35454:'use such as transportation, dwellings, shipping, ghost towns, military, farming, burial, and many others. 58. some examples of categories of',
35455:'ha, which are not intended to be all encompassing, include: monuments, landmarks, landscapes, national parks, museums, cemeteries, libraries, and districts',
35456:'or regions. 32 in accordance with sffas 29, par. 17. 33 par. 25 item c. page 19 technical release 9',
35457:'fasab handbook, version 20 06/21 technical release 9 heritage asset examples 59. example 1: pompeys pillaris categorizedasa nationallandmarkthatisbothhaandsl. this landmark',
35458:'is a rock outcropping, a massive natural block of sandstone and a major landmark along the route of the lewis',
35459:'and clark expedition. because of its historical significance, including clark’ssignature carved on its surface, it is included in the national',
35460:'historic landmarks program and therefore considered an ha. the national park service categorizes pompeys pillar as a national historic landmark',
35461:'property type of “landscape – naturalfeature.” themanagingagencyhasdeterminedthephysicalunittobethenumber of landmarks in this category. 60. example 2: somenationalmonumentsareincludedinhacategories becauseoftheir historic or natural',
35462:'attributes and because sometimes they contain aspects of both. an example is the grand staircaseescalante national monument,34 which has primarily',
35463:'landscape attributes. this monuments vast and austere landscape embraces a spectacular array of scientific and historic resources. this high, rugged,',
35464:'and remote region, where bold plateaus and multihued cliffs run for distances that defy human perspective, was the last place',
35465:'in the continental united states to be mapped. today, this unspoiled natural area remains a frontier, a quality that greatly',
35466:'enhances the monuments value for scientific study. in this example the managing agency has categorized the physical unit to be',
35467:'monuments therefore, this asset would be considered one unit under the monuments category.35 61. example 3: the statue of liberty36',
35468:'and ellis island national monument37 are identified as habecauseoftheir historical significance. ellisislandwasincorporatedaspartofthe statue of liberty national monument on may 11,',
35469:'1965. the entity has selected “national 34 grand staircase also has a long and dignified human history; it is a',
35470:'place where one can see how nature shapes human endeavors in theamerican west, where distance and aridity have been pitted',
35471:'against our dreams and courage. the monument presents exemplary opportunities for geologists, paleontologists, archeologists, historians, and biologists. 35 congress granted',
35472:'the president authority to designate national monuments in theantiquitiesact of 1906, which specifies that the law’s purpose is to protect',
35473:'“objects of historic or scientific interest.” in addition to national monuments created throughpresidential action, congress establishes national monuments by passing',
35474:'a law to create each individual monument with its own purpose generally to protect natural or historic features. 36 thestatueofliberty',
35475:'was dedicated on october 28, 1886, and was designated a national monument on october 15, 1924. locatedon12acrelibertyislandinnewyorkharbor,the statue ofliberty wasa',
35476:'giftofinternationalfriendship from the people of france to the people of the united states and is one of the most universal',
35477:'symbols of political freedom and democracy. 37 ellis island was incorporated as part of the statue of liberty national monument',
35478:'on may 11, 1965. between 1892 and 1954, approximately 12 million steerage and third class steamship passengers, who entered the',
35479:'united states through the port of new york, were legally and medically inspected at ellis island. page 20 technical release',
35480:'9 fasab handbook, version 20 06/21 technical release 9 monuments” as a hareporting category and appropriately reports these hain that',
35481:'category. 62. example 4: an agency has archeological sites distributed across large tracts of agency managed lands. the lands have',
35482:'a very diverse topography and accessibility is difficult. these assets are evaluated as to their significance, have distinct public value,',
35483:'and they are recognized for research potential yielding scientific information or supporting management decisionmaking, interpretation, education, or economic benefits. thus,',
35484:'management has categorized themasha. these haare activelymaintained within the agency’s stewardship program. thisagency’smanagementhasmadeadeterminationthattoreceive “significant” or “priority” status, the hamust also',
35485:'meet one or more of the following agency recognition criteria: official designation; prior financial investment in preservation, protection, interpretation, or',
35486:'use; or an agency approved management plan. stewardship land 63. where parcels of land have more than one use, the',
35487:'predominant use of the land should be considered the major use. in cases where land has multiple uses, none of',
35488:'which is predominant,adescriptionofthemultipleusesshouldbepresentedinnotedisclosure. the appropriate level of categorization of sluse should be meaningful and determined by management based on the',
35489:'entity’s mission, types of sl use, and how it manages the assets. stewardship land examples 64. example 1: an example',
35490:'of a multipleuse category includes sl for which legislation prescribes the multiple use that will be achieved or authorized on',
35491:'the same tracts of land including, but not limited to domestic livestock grazing, fish and wildlife development and utilization, mineral',
35492:'exploration and production, rightsofway, outdoor recreation, and timber production.38 65. because the legislation requires “multipleuse” of all of the natural',
35493:'resources related to the sl,withnosingleusebeingpredominant,themajorcategoryofuseis “multiple.” however, a description of the multiple uses should be presented. categorization of sl could',
35494:'be disclosed by geographic management unit, such as a state or region or perhaps a lower level management unit such',
35495:'as a field, district, or area jurisdiction. the management units 38sffas 29 par. 34 and footnote 17 specifically exclude the',
35496:'natural resources related to the land. page 21 technical release 9 fasab handbook, version 20 06/21 technical release 9 could',
35497:'be reported consistent with the manner in which they are managed, that is, by a specific land use plan or',
35498:'management plan, which specifies how the natural resources related to the land will be used over a longterm period i.e.,',
35499:'one or more decades. 66. example 2: slis categorizedasrecreationalwhenthis is thepredominateuseoftheland. within this category, the physical units could be reported',
35500:'as a region, park, district, or other field unit jurisdiction. 67. example 3: slcanalsobecategorizedbyfunction. landcansupport suchactivitiesas education, transportation systems, and',
35501:'farming and grazing. for example, the mission of an agency may be to enhance the quality of life, promote economic',
35502:'opportunity, and carry out responsibilities to protect and improve trust assets such as providing schools and other opportunities for learning.',
35503:'physical units within this category could be reported as townships, parcels, tracts, acres, or other units. 68. example 4: an',
35504:'agency manages lands that were formally public domain lands and were withdrawn39 forthepurposeof constructingstatutorilyauthorizedfederalwaterprojectsand their associated canals, laterals, and drains',
35505:'to a provide water for agricultural, municipal, and industrial uses; b maintain flood control; and c generate power. in this',
35506:'federal water projects category, the number of units could be the number of major projects consisting of numerous related divisions,',
35507:'units, features, or facilities. quantification general issues 69. sffas29requiresha/sltobequantifiedinphysicalunits,ratherthaninmonetaryterms.40 however,sffas29doesnot define theterm physicalunits or specifywhichphysicalunits should be used to quantify',
35508:'the variety of ha/slcategories and subcategories held by federal entities. accordingly, quantities may be reported in a manner consistent with',
35509:'data available from existing management systems. 70. physical units could consist of: items to be counted such as monuments, museum',
35510:'collections, facilities housing museum collections, parcels, tracts, sites, regions, districts, locations, management units; or units of measure such as inches,',
35511:'linear feet, square or 39 withdrawal of public lands means the removal or withholding of public land, by statute or',
35512:'secretarial order, from operation of some or all of the public land laws. 40 sffas 29, par. 25 and 40.',
35513:'page 22 technical release 9 fasab handbook, version 20 06/21 technical release 9 cubic area feet or yards, acres, miles,',
35514:'or kilometers. there may be other metrics to use in quantifying ha/slnot listed here. 71. however, counting physical items may',
35515:'not be necessary, particularly for collectiontype ha, such as books and records contained in libraries. it may be appropriate to',
35516:'define the physical unit as a collection, or a group of assets located at one facility, and then count the',
35517:'number of collections or facilities. for sl, it may be appropriate to define the physical unit asregionsorareaswhereregionsandareasaremanagementjurisdictionsandthencount and disclose the',
35518:'number of regions, areas, or acres, depending on the relevance of the metric used and the cost/benefit of capturing the',
35519:'information. 72. the above discussion highlights the need for management to differentiate between a detailed records that may be needed',
35520:'for management control and safeguarding purposes, and b financial statement reporting purposes for note disclosures. many entities have stewardship responsibilities',
35521:'and control systems that can be traced to public laws or administrative rules. as good stewards, they may track individual',
35522:'assets and asset categories for control purposes that do not warrant separate presentation or disclosure in theirfinancialreports. ontheotherhand,agenciesalsoneedtodetermineiftherearelegal or regulatory',
35523:'requirements for reporting ha/slin the financial statements. regardless of how the entity chooses to disclose, reporting should be done consistently.',
35524:'also, as noted in sffas29par. 82ofthebasisforconclusions,managementshoulddocumentitsreasoning for the categorization and unitization. heritage asset examples 73. the following examples represent potential',
35525:'approaches for quantifying heritage assets in the footnote disclosure. 74. example 1: wild and scenic is a river designation that',
35526:'can be bestowed by congress. in this example, the agency manages multiple wild and scenic rivers and quantifies them in',
35527:'terms of the number of rivers. this presentation is at a higher level of aggregation than is required to meet',
35528:'management objectives, which may include the number of river miles, types of river miles i.e., recreational, scenic, or wilderness, river',
35529:'segments, and other aspects of river management needed to fulfill mandates required by public laws and regulations. page 23 technical',
35530:'release 9 fasab handbook, version 20 06/21 technical release 9 75. example 2: similarly,nationalscenic trails arecongressionallydesignated.anentity may report the number',
35531:'of trails it manages even though it may not manage the entire length of certain trails.41 additional data on these',
35532:'trails, such as the portion of each trail the entity is responsible for managing, exists within their management systems but',
35533:'does not have to be reported in the financial footnote disclosure. however, the entity may choose whether to report this',
35534:'supplemental data in its financial report as other supplementary information. 76. example 3: certain national historic landmarks are congressionally designated.',
35535:'an entity may choose to report only the number of landmarks under this category, even though these landmarks may contain',
35536:'multiple properties within each landmark. another entity which also reportsnationalhistoriclandmarksmayinsteadchoosetoreportthepropertieswithineach landmark. both of these reporting methods are acceptable under sffas',
35537:'29. 77. example 4: archives, which include, but are not limited to, paper records and manuscripts, could be reported in',
35538:'cubic feet such as 238 million cubic feet or 211 collections. in terms of archived electronic documents, the disclosure could',
35539:'be to report such records in number of logical data such as 30 million or 830 collections. 78. example 5:',
35540:'museumitems discovered onslandmanagedinconnectionwithhainclude, but are not limited to, dinosaur bones, fossilized remains or traces of dinosaurs, herbarium specimens, mammals, insects,',
35541:'cultural objects depicting early human occupation, architecture,engineering,andamerican history. themuseum itemsaremaintainedand managed to professional standards by federal and nonfederal repositories. the',
35542:'entity has determined that it will report these assets based on the number of facilities repositories housing the museum items',
35543:'collections. this categorization is suitable for the entity given the latitude allowed by sffas 29 regarding reporting relevant and reliable',
35544:'information on aggregation of units. stewardship land example 79. reportingforeachmajorcategoryofsluseshouldincludephysicalunitsbymajorcategory of use. 80. example 1: an agency is organized largely',
35545:'by the states in which it has management responsibility for sl. within each state there are jurisdictions that are smaller',
35546:'management units sometimes identified as field offices or districts. within a field office there are smaller management units identified as',
35547:'area offices. this agency has selected the field office level asthe “physicalunit” forreportingitsaccountabilityoversl. thisphysicalunitwasselected 41 many trailsystems consistofsegmentsmanaged byoneormorefederalagenciesaswellasbynonfederalentities. for',
35548:'purposes of this example, each federal agency would be responsible for disclosing that which it manages. page 24 technical release',
35549:'9 fasab handbook, version 20 06/21 technical release 9 because theagencyusuallydevelopsitslanduseplansatthislevelalthough certain parcels of land within a field office may',
35550:'require a distinct plan separate from the rest of the management unit. the agency has 118 field offices and based',
35551:'on its assessment, it is most appropriate to report 118 physical units of sl. supporting documentation 81. in the basis',
35552:'for conclusions of sffas 29, par. 8688, the fasab briefly discusses the fundamentalproblemsassociatedwithprovidingcorroboratingdocumentationtoauditorson historical assets which predate the effective date',
35553:'of the standard, and were acquired in an environment in which the historical records were not required to be retained',
35554:'and therefore may not exist or be inadequate. the following section addresses some of the complexities associated with documentingamerica’s stewardship',
35555:'lands and heritage assets. figure 1: 82. thepublic domainoncestretchedfrom theappalachianmountainstothepacific. ofthe approximate 1.8 billion acres of public land acquired by',
35556:'the united states, about twothirds went to individuals, corporations, and the states. the remaining public domain was set page 25',
35557:'technical release 9 fasab handbook, version 20 06/21 technical release 9 aside for national forests, wildlife refuges, national parks and',
35558:'monuments, and other public purposes. 82. the majority of the public domain that remains today is stewardship land. as identified',
35559:'in the above graphic, this land was acquired through various purchases and cessions prior to 1870. duringtheseearlyperiods1776totheearly/mid1900sfewenvisionedtheneedfor the kinds of',
35560:'records, documents, and statistics that are required today. acquisitions and disposals of land, whether from purchase, cession, or treaty, were',
35561:'not documented in the samemanneraslandtransactionsinmoremoderntimes. forexample,asidentifiedinitem 6 of the above graphic, the boundary of the louisiana purchase was not well',
35562:'defined which led to a dispute between spain and the united states resulting in the boundary adjustment of 1819. surveys',
35563:'of the public land east of the mississippi river began in 1785. two years later, survey of only 4 ranges',
35564:'about 144 square miles had been completed. much of the stewardship land remains unsurveyed today. 83. definitive documentation on the',
35565:'majority of these lands is not available; therefore management must choose alternative methods of satisfying management’s assertions for these assets.',
35566:'for assessing land, for example, these alternatives could mirror areas defined in the “categorization” section of this document, such as',
35567:'the number of areas of recreational use, geographic management areas, and federal water projects of fish hatcheries. 84. haalsohavemany ofthesamedocumentationproblems',
35568:'sinceantiquitieslawsand preservation acts did not go into effect prior to artifacts having been collected and preserved. many of these assets',
35569:'may reside in federal and nonfederal repositories. however, records and detailed listings from these periods generally do not exist. in',
35570:'more recent times, legislation has strengthened the laws and rules regarding preservation and documentation over these assets.42 methodology for developing',
35571:'supporting documentation 85. ideally, agencies should have a historical file evidencing ownership of ha/sl. but, when original property records or',
35572:'other documentation for example, deeds, tax assessments, insurance records, etc. for ha/sldo not exist, a methodology needs to be employed',
35573:'in 42 for example, theantiquitiesact of 1906 provides authority for the president to establish national monuments and gives authority to',
35574:'the secretaries ofagriculture and interior to issue permits for investigation and collection of resources from federal land and for collections',
35575:'. . . to be made for permanent preservation in public museums; the museum properties managementact of 1955 authorizes the',
35576:'secretary of the interior through the national park service to preserve objects found within individual national parks; and the national',
35577:'historic preservationact of 1966 directs the secretary of the interior to promulgate regulations that ensure that significant prehistoric and historic',
35578:'artifacts and associated records are deposited in an institution with adequate longterm curatorial capabilities. page 26 technical release 9 fasab',
35579:'handbook, version 20 06/21 technical release 9 order to develop alternative documentation to support management’s assertions of federal ownership. for',
35580:'example, maintenance or renovation contracts, historical maintenance records or a history of payment of invoices, minutes of meetings, historical data',
35581:'bases, surveys of land records, a history of past/historical practices e.g., establishing defacto ownership, or other relevant sources of information',
35582:'may provide acceptable alternative evidence of government ownership of ha/sl. page 27 technical release 9 fasab handbook, version 20 06/21',
35583:'technical release 9 section iii. assessing and reporting condition statement of federal financial accounting standards 42, deferred maintenance and repairs,',
35584:'amending statements of federal financial accounting standards 6, 14, 29 and 32, rescinded the requirement to report condition information regarding',
35585:'heritage assets and stewardship land as rsi. the following guidance offers insights regarding condition assessments and factors that may influence',
35586:'reporting of deferred maintenance and repairs information. the guidance has not been updated to conform to the new standards and',
35587:'should be considered other literature until revised implementation guidance, if any is provided. assessing condition 86. thecondition43 ofha/slis tobereported as',
35588:'rsi unless itisreportedelsewhere inthe report containing the basic financial statements.44 for consistency, condition should generally be reported for asset categories,',
35589:'rather than for individual assets.45 however, the assessment of condition for ha/sl, which have a unique nature and specialized use,',
35590:'does not always lend well to traditional physical assessments such as “good,” “fair,” and “poor.”46 such assessments are usually applied',
35591:'to items of general pp&e that break, wear out, or become obsolete while in service. 87. traditional condition assessments or',
35592:'evaluations typically compare the current condition of an operating asset such as a piece of equipment against its original condition.',
35593:'as such, traditional condition assessments provide some indication of an asset’s status in its useful life cycle, i.e. the asset’s',
35594:'ability to perform as planned for the expected period of time. however, unlike items of general pp&e whose utility is',
35595:'expended over time in order to 43 sffas 29 par. 41 footnote 22 gives a detailed explanation of condition, and',
35596:'par. 57 discusses the reasons for reportingcondition as rsi. inaddition, sffas 6par. 77, 78, and 81 andfootnotes 58and62provide someinsight into',
35597:'condition. 44 sffas 29 footnote 11 states in part: “condition is the physical state of an asset. the condition of',
35598:'an asset is based on an evaluation of the physical status/state of an asset, its ability to perform as planned,',
35599:'and its continued usefulness.” 45 see par. 81 and 84 of sffas 29 for more details. 46 for example, the',
35600:'existing state of the liberty bell i.e., cracked and unable to ring does not necessarily mean that the condition of',
35601:'the bell is poor. page 28 technical release 9 fasab handbook, version 20 06/21 technical release 9 produce goods or',
35602:'services, ha/slgenerally have an unlimited or indeterminate useful life or are expected to be preserved indefinitely. 88. agencies may assess',
35603:'the condition of ha/sl as a function of their daytoday operations and document condition through periodic assertion/assessment statements provided by',
35604:'their field office managers. in order to make these assessments, management should consider developing criteria or guidelines to enable agencies',
35605:'to assess condition. 89. agencies also need to evaluate the cost and benefits of doing condition assessment surveys. such things',
35606:'as cycling the assessments on a rotating basis, the frequency of assessments i.e., every 3 or 5 years and the',
35607:'criteria and methodology used for making such assessments need to be considered. management needs to document the procedures and methodology',
35608:'used on a consistent basis. 90. although it is not possible to explicitly cover every circumstance that may arise, the',
35609:'examplespresented in this technical release are intended to provide preparers with a broad range of acceptable methods for assessing and',
35610:'reporting condition consistent with the purposes intended by sffas 29. this technical release provides the foundation for preparers to exercise',
35611:'judgment in formulating their course of action. develop criteria forassessing condition 91. the appropriate criteria for assessing condition depend on',
35612:'factors such as the agency’s mission, the nature of the assets, the purpose for which they are managed, and their',
35613:'intended use. the criteria that are used by an agency to assess condition should be explained in suitable detail in',
35614:'rsi. 92. anagencycoulddeterminetheconditionofsomeofitsha/slthroughsitemonitoring. the agency leverages its resources through partnerships with state, local, tribal organizations, other law enforcement personnel, and',
35615:'other volunteers under the direction of agency scientists to monitor thousands of sites annually. the heritage and stewardship land sites',
35616:'are visually inspected using previously prepared maps, photos, current land uses, site forms, and otherbaselinedata to monitor and document changesand',
35617:'determine trendsand conditionofthesiteascomparedtotheconditionwhenthesitewasfirstdiscovered. atrisk sites are usually monitored more frequently than sites that have remained stable. reporting condition 93. according',
35618:'to sffas 29, par. 26, 27, and 41: page 29 technical release 9 fasab handbook, version 20 06/21 technical release',
35619:'9 entities should report the condition of the heritage assets and stewardship land which may be reported with the deferred',
35620:'maintenance information as required supplementary information. entities should include a reference to the condition and deferred maintenance information if reported',
35621:'elsewhere in the report containing the basic financial statements. entities should disclose that multiuse heritage assets are recognized and presented',
35622:'with general pp&e in the basic financial statements and that additional information for the multi use heritage assets is included',
35623:'with the heritage assets information. heritageassets 94. conditioninformationfor haandthedifferent categories ofhashouldfitthe particular situation and circumstances. the emphasis should be on',
35624:'evaluating the efforts to preserve hainthesamestateas whentheywerediscovered. additionally,for somecategories condition information should be reported on individual ha, while condition information',
35625:'for other categories is more appropriately reported for a collection. 95. the primary focus for museum collections is preservation. great',
35626:'attention is given to: 1 stabilizing objects in the condition in which they were received; and 2 preventing further deterioration.',
35627:'documenting facility preservation procedures to safeguard assets i.e., adequately protected, properly managed, and not materially degraded while under government care',
35628:'may be more appropriate than assessing individual objects as having good, fair, or poor condition.47 96. aspreviouslynoted,haaregenerallyexpectedtobepreservedindefinitely.48 however,this expectation needs',
35629:'to be tempered with the understanding that all physical things will ultimately deteriorate. for example, in the restoration of the',
35630:'historic flag, “old glory,” the painstakingly careful work to remove the flag from an old linen backing could have caused',
35631:'some damage to the flag itself. moreover, many of the flag’s woolen threads are already cracked as a result of',
35632:'flapping in the wind, aging, and exposure to light. the goal of safeguarding is to preserve hafor as long as',
35633:'possible, and to manage their condition in accordance with their intended use and not to unduly hasten their deterioration. 49',
35634:'47 the basis for conclusions to sffas 6 highlights the importance of safeguarding ha/sl. 48 sffas 29, par. 16. 49',
35635:'sffas 6, basis for conclusions, par. 125 states that the government must demonstrate that it is being an appropriate steward',
35636:'for these assets and must be able to answer basic questions such as is the government effectively managing and safeguarding',
35637:'its assets? note disclosures should answer this question. however, the assertion that haare safeguarded is a significant statement that implies',
35638:'management controls are operating effectively, and entities making this assertion should have a credible basis for doing so. page 30',
35639:'technical release 9 fasab handbook, version 20 06/21 technical release 9 heritage asset examples 97. example1:anindiancliffdwellingmaybediscoveredwithonlythreeremainingwalls. the fact that the',
35640:'wooden roof has long since rotted away and one wall has fallen due to climatic conditionsover manyyearsdoes not mean that',
35641:'the remaining structure should be judged to be in poor condition. the original function of the cliff dwelling as living',
35642:'quarters is no longer relevant, but it must now be viewed in terms of its archeological value. thus such a',
35643:'structure may be viewed to be in “acceptable” or “satisfactory” condition because either its particular state indicates that it will',
35644:'be preserved indefinitely or any necessary intervention hasbeenaccomplishedtoavoidfurtherdeterioration. shouldtherebearealpossibilitythat another wall could collapse due to erosion from climatic conditions; the',
35645:'condition may be evaluated as “needs intervention” or “threatened.” 98. example 2: the condition of museum collections may be evaluated',
35646:'in terms of a specific facility’s methodology used to preserve the assets, i.e., the facility curating the museum collection, rather',
35647:'than by individual assets or collections.50 for example, prehistoric pottery that is retrieved from an archeological dig in broken pieces',
35648:'cannot be classified as beingin “poor” condition. theoriginalfunctionofthepotteryasacontainertostorewateris no longer relevant, but rather it must be viewed in terms of',
35649:'its value to understand a prehistoric culture. however, the item could deteriorate beyond the condition in which it was found',
35650:'through improper care. 99. museum collectionsunlikeother haarecuratedinaspecialfacility. thecriteriafor reporting museum collection condition information is based directly on the facility housing',
35651:'the museum collection itself, because the facility determines whether the collection, as a whole, is in stable condition. numerous factors',
35652:'such as temperature, relative humidity, and dust and pest controlare used toevaluate facilitiesto determine theirabilityto minimize any deterioration that could',
35653:'happen to its contents.51 consequently, a museum collection housed in a facility meeting museum conservation professional standards may be properly',
35654:'viewedas beingin “acceptable” condition. amuseum collectionhousedinasubstandard facility can be viewed as being in a state “requiring intervention.” rehabilitation of ha',
35655:'100. rehabilitation of a ha, to make possible a compatible use for that asset through repair, alterations, andadditionswhilepreservingthoseportionsor featuresthatconveyitshistoric, 50',
35656:'sffas 29, par. 16 and par. 81. 51 this methodology is consistent with standard professional museum practice as recommended by',
35657:'museum conservators and museum associations. page 31 technical release 9 fasab handbook, version 20 06/21 technical release 9 cultural, or',
35658:'architectural values, may turn it into a multiuse heritage asset. condition information would not be based on comparing the asset',
35659:'to its original, new state, nor to its state at the time it was first recorded or documented by archaeologists,',
35660:'but would rather be based on comparing the asset to its condition at the time it was originally rehabilitated. in',
35661:'this example, the rehabilitation work and resulting use in government operations moves the asset from the hacategory to a multiuse',
35662:'hacategory and as a result, it is reported as general pp&e. as such, the cost of the rehabilitation work would',
35663:'be capitalized and the property would be reported on the balance sheet with an appropriate value. 101. some former hahave',
35664:'been recreated at the same site, and according to the same design usingcontemporarymaterials,astheoriginalassets. someoftheserecreationsarenotha while some others have been determined',
35665:'to complement or add to the significance of the site and any condition information on the recreation may fall within',
35666:'the purview of general pp&e or hadepending upon its classification. stewardship land 102. based on guidelines and criteria established by',
35667:'agencies for assessing condition, a key to the evaluation of land is whether it is capable of fulfilling its primary',
35668:'use. for example, land conditioncould be considered acceptablewhen it iscapable of supporting oneor more of its authorized uses. on the',
35669:'other hand, land condition may be considered unacceptable when interventionisneededduetoenvironmentalcontaminationthatwillcausehumansorwildlife to be injured by virtue of their proximity to the',
35670:'contaminated land. under such circumstances, readers would be referred to the environmental cleanup liability note in its financial statements for',
35671:'information as applicable. 103. the following discussion describes some of the relevant factors that exist as to why it is',
35672:'difficult to apply the concept of “condition”52 to the definition of land provided in the standard.53 104. land exists as',
35673:'a result of thousands, millions, or billions of years of events such as volcanoes, earthquakes, fire, floods, erosion, collisions with',
35674:'cosmic debris, and so on. these are all natural events that are both creative and destructive. they formed the land',
35675:'and may also cause its destruction. agencies are not able to easily assess the durability, obsolescence, or quality of design',
35676:'and/or construction of land like agencies do for constructed assets. 52 sffas 29 par. 41, footnote 22. 53 asolid part',
35677:'of the surface of the earth exclusive of depletable and renewable natural resources. page 32 technical release 9 fasab handbook,',
35678:'version 20 06/21 technical release 9 105. land is also not subject to factors, such as accidents, catastrophes, disasters, and',
35679:'obsolescence within the same context as constructed assets because the physical state of landendlesslychangesbasedontheforcesofnature. somenaturalforceshaveimmediate effects on the asset, others,',
35680:'take weeks, months, or years, and still others, such as climatic changes or major geological events can produce a very',
35681:'long term effect. the concepts of “performing asplanned,” “continued usefulness” and “performance capability” are difficult to apply to land. land',
35682:'does not perform, it exists, recycles, and changes form depending on forces of nature. 106. the following provide examples of',
35683:'why the effects of natural occurrences of nature on the land are unpredictable. alightningstrikesparking awildlandfirewouldnothaveimpactonthelanditself but could devastate a plant',
35684:'community in a matter of minutes. however, that same fire could produce an invigorating effect on the plant community over',
35685:'the long term. yellowstone national park was so designated, in part, because of its geologic activity. the underlying volcanism that',
35686:'makes the park unique by producing hot springs, geysers, etc., will likely cause an immense change in its landscape at',
35687:'some point in the future. under normal or average conditions, some soil erosion occurs due to flooding because of wind',
35688:'and water action on all land. in an event such as a flash flood, erosion occurs at an accelerated rate,',
35689:'even leaving the formation of gullies with unstable banks as vegetation cover is swept away in a flood. heavy rains',
35690:'with a movement of water across a naturally barren landscape can lead to shortterm undesirable effects. however, in the long',
35691:'term, gullies are stabilized by the vegetation that grows back and become the natural course for water to take in',
35692:'future years when rainfall occurs. these natural processes erosion and stabilizationoccurwithorwithouthumaninterventionandmaynot be prevented by any condition of the land. drought',
35693:'is inevitable and has tremendous ecological and socioeconomic consequences. both shortterm and longterm droughts significantly impact natural resources and human',
35694:'lives. during short droughts, the lack of moisture typically causes reduced plant and animal productivity. persistent droughts, characterized as several',
35695:'consecutive years with below average precipitation, are more infrequent but may be widespread and can result in significant economic and',
35696:'ecological stress and ecosystem alterations. when short or longterm droughts subside and precipitation returns to normal or above normal levels,',
35697:'the vegetative resource can respond dramatically and the land can quickly return to its natural state. various desirable and sometimes',
35698:'undesirable seeds that have been lying dormant in the soil for years will germinate and vegetative growth can be extensive.',
35699:'such was the case in page 33 technical release 9 fasab handbook, version 20 06/21 technical release 9 arizona in',
35700:'2005. after a 7plus year drought, the rains came at the right time and native vegetation flourished; so much that',
35701:'during 2006 there were many fire hazards. 107. agencies do not typically perform maintenance on land. unlike constructed assets, land',
35702:'does not meet the definition/description of maintenancethe act of keeping fixed assets in acceptable condition. maintenance includes preventive maintenance, normal',
35703:'repairs, replacement of partsand structural components, and other activities needed to preserve an assetsothatitcontinuestoprovideacceptableservicesandachievesitsexpectedlife. the type of activity maintenance as',
35704:'described herein is not scheduled, performed, or deferred on land. 108. whileconditionisnot easilyapplied to land, it can be readilyappliedtoconstructed changes',
35705:'to the land that require recurring maintenance, such as a constructed marsh specifically builttoprovidehabitat. anotherexampleislandthathasbeencontaminatedbytherelease of hazardoussubstancesorland that hasbeen usedto',
35706:'store, treat, ordisposeof hazardous wastes. this information should already be disclosed in the notes to the financial statements as environmental',
35707:'liabilities and could be referenced in the stewardship note. stewardship land examples 109. example 1: an agency has a mission',
35708:'of conserving, protecting, and enhancing fish and wildlife and their habitats. accordingly, the ability of the agency’s land to provide',
35709:'integrated habitat and life support for permanent resident populations and for migratory populations might provide a criterion to evaluate its',
35710:'condition. for example, does the land support sufficient vegetation to provide habitat for native species or are coastal or other',
35711:'marshes sufficienttosupportmigratorybirdpopulations? theagencywouldevaluateitslandagainst these criteria and the results of this evaluation may be that the condition of the land is',
35712:'sufficient to support the mission of the agency i.e., the land provides integrated habitat and life support for permanent resident',
35713:'populations and for migratory populations and such condition would be disclosed. if the agency had constructed habitat by changing the',
35714:'land and if that constructed habitat required recurring maintenance that either was or was not performed, then the condition of',
35715:'the constructed habitat could be disclosed. 110. example 2: an agency manages a small portion of the land under federal',
35716:'ownership for which it is required to clean up contamination resulting from past waste disposal practices, leaks, spills, and other',
35717:'past activity, which have created a public health or environmental risk. thecontaminatedsitescoveringabout10% oftheagency’sslhaveresultedfrom nuclearpowered aircraft carriers, submarines, and other nuclear',
35718:'ships or from the stockpile of lethal or incapacitating chemical warfare agents and munitions. these contaminated sites that make the',
35719:'surface of the earth uninhabitable by people would be listed in the page 34 technical release 9 fasab handbook, version',
35720:'20 06/21 technical release 9 environmentalcleanupliabilitynotestotheagency’sfinancialstatements. theslcondition disclosure could identify these areas and report their condition as unacceptable. 111. the',
35721:'condition of the agency’s noncontaminated lands might be disclosed as sufficient to support the mission of the agency based on',
35722:'the agency evaluating this land in relation to its mission. if insufficient budgetary resources or other intervening factors prevented the',
35723:'mitigation of the environmental contamination, the agency would disclose this information as applicable in its environmental cleanup liability note to',
35724:'the financial statements and could reference that note in its stewardship note disclosure. the agency would also report the estimated',
35725:'cost of environmental cleanup as deferred maintenance in accordance with environmental liability standards.54 54 standards for determining and reporting deferred',
35726:'maintenance are contained in sffas 6, which requires disclosures related to the condition and the estimated cost to remedy deferred',
35727:'maintenance of pp&e. page 35 technical release 9 fasab handbook, version 20 06/21 technical release 9 section iv: governmentwide reporting',
35728:'sffas 29requiresa balancesheet note reference anda notedisclosure of ha/slinformation in the u.s. governmentwide financial statement. the governmentwide balance sheet should',
35729:'reference a note that discloses information about stewardship land and heritage assets, but no asset dollar amount should be shown.',
35730:'the note disclosure should include a brief statement explaining how ha/sl relates to the mission of the federal government; a',
35731:'description of its predominant uses; and a general reference to agency reports for additional information about ha/sl. the governmentwide financial',
35732:'statement should also disclose that multiuse heritage assets are recognized and presented with general pp&e in the basic financial statements',
35733:'and that additional information for the multiuse heritage assets is included with the heritage assets information. page 36 technical release',
35734:'9 fasab handbook, version 20 06/21 technical release 9 appendixa: basis for conclusions a1. the ha/sl taskforce that developed this',
35735:'technical release was comprised of over a dozen different entities, varying in size, with experts in the field who had',
35736:'significant responsibility for heritage assets and/or stewardship land. the taskforce approached this implementation guide project by addressing the specific areas',
35737:'in sffas 29 that focus on identification, categorization, quantification and condition of these assets. the taskforce believed that the most',
35738:'meaningful information to guide preparers was through examples of how entities currently or in the past have identified, categorized and',
35739:'quantified heritage assets and stewardship land, as well as how they assessed their condition. a2. this technical release provides a',
35740:'variety of examples that are representative of the many types of stewardship assets in existence. in addition, this technical release',
35741:'provides numerous ways to disclose heritage assets and stewardship land since sffas 29 allows entitiesconsiderable latitude and flexibilityin achieving the',
35742:'objective of relevant and reliable information for users. a3. typicallystandardsortechnicalreleasesdonotaddressmateriality. thetaskforcebelieves that since no dollar amounts are assigned to these',
35743:'assets and that traditional materiality judgments about financial information are primarily quantitative and focused on dollar amounts that materiality needed',
35744:'to be addressed. thus, the taskforce provided an approach for considering materiality to give preparers implementation guidance in applying materiality',
35745:'to heritage assets and/or stewardship land. a4. as a result of the taskforce deliberations, it reached a consensus on the',
35746:'material presented in this technical release. a5. the exposure draft, implementation guide for statement of federal financial accounting standards 29:',
35747:'heritage assets and stewardship land, was issued june 11, 2007 with comments requestedbyaugust13,2007. four commentletterswerereceivedfrom the following sources: federal internal',
35748:'nonfederal external users, academics, others 0 1 auditors 0 0 preparers and financial managers 3 0 page 37 technical release',
35749:'9 fasab handbook, version 20 06/21 technical release 9 a6. the committee considered responses to the exposure draft at its',
35750:'september 27, 2007 aapc meeting. the majority of the respondents agreed with the proposed guidance. specific concerns were raised by',
35751:'several respondents related to developing supporting documentation when property records do not exist. the committee believes there are number of',
35752:'ways to develop acceptable alternative documentation to support management’s assertions of federal ownership of heritage assets and stewardship land. par.',
35753:'85 is revised to address these concerns. in addition, clarifying language was added to par. 4546 to help preparers in',
35754:'determining whether land meets the criteria for general pp&e land, stewardship land, and land rights as defined in sffas 29.',
35755:'also, the technical release has been revised to highlight that the examples used in assessing and reporting condition provide a',
35756:'broad range of acceptable methods consistent with the purposes and intent of sffas 29. finally, clarifying edits, revisions, and helpful',
35757:'examples were added to address commentators concerns. page 38 technical release 9 fasab handbook, version 20 06/21 technical release 9',
35758:'appendix b: excerpts from sffas 29 heritageassets and stewardship land see sffas 29, par. 1105. page 39 technical release 9',
35759:'fasab handbook, version 20 06/21 technical release 9 appendix c: illustrative disclosures please note: appendix c illustrates heritageassets and stewardship',
35760:'land disclosures at thecomponent entity level. these illustrative disclosures may only include selected portions of a full disclosure as required',
35761:'by sffas 29. these illustrations are considered nonauthoritative guidance and are not required to be followed. footnote disclosure heritageassets: example',
35762:'1: par. 25 a. and b. of sffas 29 the library of congress classifies its collections as ha: assets with',
35763:'historical, cultural, educational, artistic or natural significance. its mission is to maintain a universal collection and provide access for current',
35764:'and future generations. the library’s collection development policies are designed to fulfill its responsibilities to serve 1 the congress and',
35765:'united statesgovernment asawhole,2thescholarlyandlibrarycommunity,and3thegeneralpublic. writtencollection policy statements ensure that the library makes every effort to possess all books and library materials',
35766:'necessary to the congress and various offices of the united states government to perform their duties; a comprehensive record, in',
35767:'all formats, documenting the life and achievement of theamerican people; and a universal collection of human knowledge embodying primarily in',
35768:'print form the records of other societies, past and present.55 copyrightdepositsareamajorsourceofthelibrary’scollectionsofamericana. thelibraryalso acquires materials by purchase, transfer from other federal',
35769:'agencies, gift, domestic and international exchange, or by provisions of state and federal law. many of these materials are foreign',
35770:'publications. various preservation methods are used to maintain the collections, and disposals occur only for the exchange and gift of',
35771:'unwanted or duplicate copies. stewardship land: example 2: par. 40 a. d. of sffas 29 55 clinical medicine and technical',
35772:'agriculture are the responsibilities of the national library of medicine and national agricultural library, respectively. page 40 technical release 9',
35773:'fasab handbook, version 20 06/21 technical release 9 agency x meets its mission by managing the lands and their various',
35774:'resources so that they are utilized in the combination that will best meet the needs aswell asthe enjoyment of both',
35775:'present andfuture generations oftheamericanpeople. theseresources include bothnatural and culturalhaof scenic, scientific, andhistorical value. the management ofthelands andtheir associated haare the',
35776:'essence of theagency’s mission. the agency has been entrusted with stewardship responsibility for the management of natural resourcesonandbeneathamerica’sslas legislatedthroughp.l. 94579.',
35777:'landuse plans, developed with public involvement, are the mechanism by which use and levels of use are determined. the agency',
35778:'is required to develop, maintain, and, when appropriate, revise land use plans that divide the land into tracts or areas.',
35779:'the agency’s stewardship mission is to be environmentally responsible for commercial and noncommercial uses of the natural resources depletable and',
35780:'renewable associated with sl. p.l. 94579 prescribes the uses that will be achieved or authorized on the land. the agency',
35781:'has 4 major categories of use: multiple; recreation; cultural, schools, and housing; and reclamation/irrigation. theagencywillprovideadescriptionofeachmajorcategoryofuseinits note disclosure. 1. multiple use:',
35782:'a. grazing: b. wildlife: c. minerals: d. rightsofway: e. recreation: f. timber: 2. recreation: 3. cultural, schools, and housing: 4.',
35783:'reclamation/irrigation: the agency reports its physical units of sl by management unit. the “management unit” jurisdictionsrepresent the management levelat which',
35784:'specificmanagementplansare developed and implemented to manage the natural resources related to the land for both present and the future periods.',
35785:'page 41 technical release 9 fasab handbook, version 20 06/21 technical release 9 agencyastewardship lands as of september 30, 200x',
35786:'category of use 200w balance 200x additions note 1 200x withdrawals note 1 200x net change 200x balance condition note',
35787:'2 multiple use 118 2 3 1 117 acceptable recreation 388 388 acceptable cultural/schools/ 1 housing 79 1 80 acceptable',
35788:'reclamation/ 1 1 irrigation 221 220 acceptable total 806 3 4 1 805 note 1: describe the major methods of',
35789:'acquisition and withdrawal of sl during the reporting period. note 2: describe what constitutes acceptable and unacceptable condition. example 3:',
35790:'american battle monuments commission significantaccounting policies par. 25 a.d. of sffas 29 heritageassets could be combined with property and equipment',
35791:'note the commission’s stewardship policies are designed to be responsive to the overall mission of thecommission to design, construct,andmaintaincemeteriesandmemorials. heritageassets',
35792:'are assets possessing significant cultural, architectural, or aesthetic characteristics. the commission considers its cemeteries, federal memorials, monuments, and markers acquired',
35793:'throughpurchaseor donationtobenoncollectionha. haare acquiredthroughpurchaseor donation, are accounted for in the commission’s property records, and are not presented in the balancesheet.',
35794:'withdrawals ofhaare recordeduponformal agreement withrecipients. additional disclosure on individual heritage asset cemeteries and memorials are found in the schedulesof hapresented',
35795:'asunaudited supplementaryinformation. cemeterylandisownedby the foreign countries in which cemeteries are located and is provided to the united states in perpetuity.',
35796:'page 42 technical release 9 fasab handbook, version 20 06/21 technical release 9 heritageassets heritage assets are significant to the',
35797:'mission of the commission. the commission presents its hain three categories; cemeteries, federal memorials, and nonfederal memorials. changes in hafor',
35798:'fiscal year 20xx were as follows: cemeteries federal memorials non federal memorials beginning of year 101xx 24 25 4 number',
35799:'acquired, fiscal year xx 0 0 2 number withdrawn, fiscal year xx 0 0 0 endofyear930xx 24 25 6 the',
35800:'commission assumed responsibilities for private memorials for the 147th engineer battalion andthe 507th parachuteinfantryregimentduringfiscalyear20x2. throughseptember30,20x2, commission cemeteriescontain over 131,000 interments.',
35801:'over 94,000 honoredwar dead, whose remainswere not recovered, arememorialized in the cemeteriesand federalmemorialsthat encompassover 1,600acres. this land is provided tothe',
35802:'commission through host agreements with foreigncountries forpermanent use as cemeteries and memorials. required supplemental information rsi disclosure par. 26 of',
35803:'sffas 29 the following illustrates sample disclosure of condition information for theamerican battle monuments commission under sffas 29. disclosure of',
35804:'condition information is also illustrated for the library of congress. however, agencies may develop and use other disclosures to fit',
35805:'their circumstances as deemed necessary. example 4: american battle monuments commission condition assessment surveys, using a fivepoint scale of one',
35806:'excellent to five very poor, identify needed future maintenance and repair projects at cemeteries and memorials in order to maintain',
35807:'real property and heritage assets in an acceptable condition of three fair or better. these surveys are reviewed and updated',
35808:'at least annually by the commission’s engineering staff. in addition, engineering projects identified improvements in cemetery irrigation, drainage, page 43',
35809:'technical release 9 fasab handbook, version 20 06/21 technical release 9 roads,parkingareas,andbuildings. asofseptember30,20xx,thecommissionhasidentifieda total of 333 maintenance, repair, and improvement',
35810:'projects, with an estimated cost of $15.8 million, to be performed in future years, subject to available funding. example 5:',
35811:'library of congress the library of congress has the world’s largest library collection, including research materials in over 450 languages',
35812:'and various media. providing access to this collection inevitably puts it at risk and could impair the library’s ability to',
35813:'serve the congress and other users in the future. however, the collections exist to be used, and management accepts the',
35814:'responsibility of mitigating risk to the collections at the same time it fulfills its mission of service to the congress',
35815:'and the nation. therefore, the library has chosen to balance the usage of the collection with the longterm preservation requirements',
35816:'of the collections. as of september 30, 20xx, the collections were determined to be in a useable condition for fulfilling',
35817:'its service mission. during fiscal 20xx, only a very small percentage of materials were removed from the collection because of',
35818:'damage caused by use and/or deterioration of the medium. the ultimate useful life of a library item varies by its',
35819:'medium e.g., book, film, tape, manuscript, disk, and the manner in which it is used and stored. the library employs',
35820:'a variety of methods to prolong the useful life of its deteriorating materials, including: the establishment of adequate environmental storage',
35821:'conditions the usage of binding or other methods to house items the mass deacidification of print materials the use of',
35822:'surrogates in serving the collections to the public the reformatting of collections to other media the library has inadequate temperature',
35823:'and humidity control in some collections storage areas; inadequate space for appropriate storage of collections materials; insufficient space for reformatting',
35824:'the acetate negative collection; and insufficient funds for reformatting. these conditions cannot be fully addressed with current funds and physical',
35825:'plant. the move of collections into the storage facility at fort meade, maryland, is serving to remedy many of these',
35826:'difficulties for books and paperbased materials, and the acquisition of the nationalaudiovisual conservation center in culpepper, virginia, is a major',
35827:'step in the preservation of film and other media. page 44 technical release 9 fasab handbook, version 20 06/21 technical',
35828:'release 10: implementation guidance on asbestos cleanup costsassociated with facilities and installed equipment status issued effective date affects affected by',
35829:'june 2, 2010 upon issuance none. none. summary this technical release is intended to address important implementation questions regarding the',
35830:'consistent application of tb20061 as it relates to asbestos cleanup costs associated with facilities and installed equipment. as federal agencies',
35831:'develop their approach to implementing sffas 6 andtb 20061 for recognition of cleanup cost associated with asbestos, it hasbecome apparent',
35832:'that an implementation strategy is needed to ensure consistent reporting of asbestos cleanup liabilities. many federal agencies continue to struggle',
35833:'with interpreting sffas 6 and technical bulletin 20061 and determining a cost effective standard implementation methodology. this guidance provides additional',
35834:'clarification of sffas 6 and tb 20061 and a framework for identifying assets containing asbestos, assessing the asset to collect',
35835:'information and/or develop key assumptions in applying acceptable methodologies to estimate asbestos cleanup costs for federal facilities and installed equipment.',
35836:'page 1 technical release 10 fasab handbook, version 20 06/21 technical release 10 table of contents page summary 1 scope',
35837:'4 effective date 4 technical guidance 5 appendixa:basis for conclusions 11 appendix b: illustrations examples of practice 14 page 2',
35838:'technical release 10 fasab handbook, version 20 06/21 technical release 10 introduction purpose 1. in accordance with fasab technical bulletin',
35839:'tb 20061, recognition and measurement of asbestosrelated cleanup costs: a. federal entities will 1 estimate both friable and nonfriable asbestosrelated',
35840:'cleanup costs and 2 recognize a liability and related expense for those costs that are both probable and reasonably estimable,1',
35841:'consistent with the current guidance in statement of federal financialaccounting standards sffas 5, accounting for liabilities of the federal government;',
35842:'sffas 6, accounting for property, plant, and equipment, chapter 4: cleanup costs; and technical release tr 2, determining probable and',
35843:'reasonably estimable for environmental liabilities in the federal government. b. federal entities will disclose information related to friable and nonfriable',
35844:'asbestos related cleanup costs that are probable but not reasonably estimable in a note to the financial statements, consistent with',
35845:'sffas 5, sffas 6, and tr 2. 2. this technical release provides a framework for identifying assets containing asbestos and',
35846:'assessing the asset to collect information and/or develop key assumptions in applying acceptable methodologies to estimate asbestos cleanup costs for',
35847:'federal facilities and installed equipment,2,3 hereafter referred to as ”real property” in this document. 1 the estimate shall be included',
35848:'as part of the “estimated total cleanup cost.” sffas 6 par. 94 2includes those assets within general pp&e, heritage and',
35849:'stewardship categories 3installed equipment “fixture” is defined in gao01179spappropriation lawvol. iv 16191 as those equipment items that are 1 permanently',
35850:'attached to the realty, or 2 if not permanently attached, a it is necessary and indispensable to the completion and',
35851:'operation of the building, or b the structure was designed and built for the purpose of housing the equipment. page',
35852:'3 technical release 10 fasab handbook, version 20 06/21 technical release 10 scope 3. the scope of this guidance is',
35853:'limited to federal real property4 that contains any form of asbestos. itprovidesadditionalclarificationofsffas6andtb20061foridentificationand recognition of asbestosrelated cleanup costs, and provides a',
35854:'methodology for identifying and recognizing asbestos liabilities associated with federal properties. 4. readers of this technical release should first refer',
35855:'to the hierarchy of accounting standards in sffas 34, the hierarchy of generally accepted accounting principles for federal entities, including',
35856:'the application of standards issued by the financial accounting standards board. this technical release supplements the relevant accounting standards, but',
35857:'is not a substitute for and does not take precedence over the standards. this technical release clarifies, but does not',
35858:'change, guidance previously provided in sffas 5, sffas 6, tb 20061, and tr 2. effective date 5. this technical release',
35859:'is effective immediately. background overview 6. prior to tb 20061, “most federal entities had recognized liabilities for the removal of',
35860:'asbestos that posed an immediate health threat i.e., friable asbestos, but many federal entities had not prepared an estimate of',
35861:'cleanup costs for the future removal of asbestos that did not pose an immediate health threat i.e., nonfriable asbestos. therefore,',
35862:'it was determined that additional guidance was needed to clarify that entities need to estimate all asbestosrelated cleanup costs and',
35863:'not just those costs related to asbestos that requires immediate cleanup.”5 4 for the purpose of this document, real property',
35864:'is defined as federal facilities and installed equipment; and includes 1 real property acquired through capital leases, including leasehold improvements;',
35865:'and 2 real property owned by the reporting entity in the hands of others e.g., state and local governments, colleges',
35866:'and universities, or federal contractors. 5 tb 20061, summary ii page 4 technical release 10 fasab handbook, version 20 06/21',
35867:'technical release 10 7. as federal agencies continue to develop their approach to implementing sffas 6 and tb 20061 for',
35868:'recognition of cleanup costs associated with asbestos, it has become apparent that an implementation strategy is needed to ensure consistent',
35869:'reporting of asbestos cleanup liabilities. many federal agencies continue to struggle with interpreting sffas 6 and tb 20061 while attempting',
35870:'to determine a costeffective standard implementation methodology for identification and recognition of an estimated liability for asbestos cleanup. relatedaccounting literature',
35871:'8. the related accounting standards are as follows: a. sffas 5, accounting for liabilities of the federal government b. sffas',
35872:'6, accounting for property, plant, and equipment c. tb 20061, recognition and measurement of asbestosrelated cleanup costs d. tr 2,',
35873:'determining probable and reasonably estimable for environmental liabilities in the federal government technical guidance methodology for identifying and estimating cleanup',
35874:'costsassociated with asbestos 9. the following methodology is for identifying and estimating cleanup costs associated with asbestos. the methodology, described',
35875:'below and illustrated in diagram 1, was developed on the premise that federal entities must recognize a liability when a',
35876:'future outflow or other sacrifice of resources as a result of past transactions or events is probable and reasonably estimable.”',
35877:'how this approach will be executed is at the discretion of the individual federal agency. 10. the following steps may',
35878:'be taken to identify real property that may contain asbestos. a. review inventory listing of all real property. page 5',
35879:'technical release 10 fasab handbook, version 20 06/21 technical release 10 b. identify and eliminate all real property or group',
35880:'of real properties6 on the list thatare not expected to contain asbestos. document the basis for elimination such as: i.',
35881:'asbestos survey results, or other records indicating the real propertyies or group of real properties is not likely to contain',
35882:'asbestos e.g., the manufacture date for items not likely to contain asbestos could be considered; ii. records indicating all asbestos',
35883:'was previously removed from the real propertyies; or iii. asset type is not likely to have asbestos or not required',
35884:'to be surveyed for asbestos e.g., railroad tracks, power lines, airfield pavements, roads, sidewalks, and land.7 c. property remaining on',
35885:'the list should be expected to contain asbestos. 11. once steps have been taken to identify real properties that are',
35886:'expected to contain asbestos, each real property or group of real properties should be assessed to collect the information in',
35887:'paragraphs a and b below. for purposes of developing asbestos cleanup cost estimates, reasonable assumptions8 can be made in some',
35888:'cases to make up for a lack of actual data. a. the scope of asbestos removal required at real propertyies',
35889:'renovation, disposal or demolition by determining the: i. most likely method of real property renovation or demolition e.g., use of',
35890:'heavy equipment, implosion/explosion, or manual methods; and 6 real property may be sorted into groups by category, type, and/or locations.',
35891:'examples of categories might include buildings, and other structures. examples of types might include railroad tracks, power lines, and sidewalks.',
35892:'locations may be facilities or sites recently built and known to be asbestos free. acombination of categories, types, and/or locations',
35893:'may also be used. 7inaccordancewithtb 20061,paragraph6,this guidance regarding asbestosrelated cleanup costs does notinclude naturally occurring asbestos noa that can be',
35894:'found in soil, rocks and mines. noais contained in land, and land is considered to have an indefinite useful life.',
35895:'therefore, noawould appropriately be accounted for under the requirements of sffas 5. 8assumptions include renovation or demolition method, the quantity',
35896:'and quality of asbestos to be removed paragraphs11. a and b and other information that affects cost e.g., asbestos survey,',
35897:'sampling, removal, and non routine materials management. as additional information becomes available, the federal entity should reevaluate its key assumptions',
35898:'and make necessary adjustments to the cost estimate and liability. page 6 technical release 10 fasab handbook, version 20 06/21',
35899:'technical release 10 ii. federal,stateandlocalregulatoryrequirementsgoverningasbestosmanagement to identify added costs to standard demolition e.g., asbestos surveys, sampling, removal,andnonroutinematerialsmanagement. regulatoryrequirementsmust be considered',
35900:'to identify additional cost considerations that may differ by location such asextent of asbestossurveys, sampling, removal, and nonroutine materials management.',
35901:'b. the amount, type, location, and expected condition of asbestos and asbestos containing materials in the real property or group',
35902:'of properties by referring to available records, to include records of comparable assets in the same asset class, reasonable surveys',
35903:'of the real propertyies and/or real property construction information. c. if the information above is either not available or not',
35904:'sufficient to support assumptions in lieu of actual data, yet the existence of asbestoshas been identified in paragraph 10 above,',
35905:'then the removal of asbestos may be considered probable but not reasonably estimable at that time. the existence of asbestos',
35906:'and a statement that such an estimate cannot bemade shouldbedisclosedin thenotestothefinancialstatements.9 the agency should estimate and recognize any other identifiable',
35907:'costs e.g., asbestos survey. 12. if sufficient information is available to develop a cleanup cost estimate or support key assumptions',
35908:'needed for the cost estimate, then one of the following estimating methodologies can be used for each real property or',
35909:'group of real properties to estimate cost of removal, containment or disposal. a. apropertyspecific cost estimatebasedonsurveydatamostaccurate,if available;or b. anextrapolationofhistoricalcostorcostestimatesforasbestoscleanupofsimilarreal propertyies;',
35910:'or c. acostmodel10 usedforanindividualrealproperty orgroupofsimilarrealproperties andinformationfromindustryspecificcostestimationpublicationsorstandardizedcost factors developed for each state; or d. other reasonable methodologies. 9tb 20061, par. 49.',
35911:'10 acostmodelis a framework upon which an estimating methodology is developed. the modelmay use mathematical equations to convert resource data',
35912:'into cost data and require users to enter a minimal amount of information to generate cleanup cost estimates. page 7',
35913:'technical release 10 fasab handbook, version 20 06/21 technical release 10 13. once the estimated asbestos cleanup cost associated with',
35914:'the removal, containment or disposal of the real property has been determined, that cost should be recognized in accordance with',
35915:'sffas 6.11 14. if the asbestos cleanup cost cannot be estimated using any of the methodologies in paragraph 12, the',
35916:'agency should estimate and recognize any other identifiable costs e.g., asbestos survey as outlined in tr 2 section 2: determining',
35917:'“reasonably estimable” environmental liabilities – 2. experience with similar site and /or conditions. 15. in accordance with sffas 6, paragraph',
35918:'96, “estimates shall be revised periodically to account for material changes due to inflation or deflation and changes in regulations,',
35919:'plans and/or technology. new cost estimates should be provided if there is evidence that material changes have occurred; otherwise estimates',
35920:'may be revised through indexing.”12 as additional information becomes available, key assumptions should be reevaluated, cost estimate revised, and necessary',
35921:'adjustments made to the liability recognition. 11 see paragraphs 98 and 101, and technical bulletin 20061, paragraph 37. 12tb 20061,',
35922:'paragraph 34: as reestimates are made, the cumulative effect of changes in total estimated asbestos related cleanup costs related to',
35923:'current and past operations shall be recognized as expense and the liability adjusted intheperiodofthechangeinestimatesffas 6par. 99. incertainscenarios, suchas whencleanupcosts have',
35924:'been fully expensed, the reestimate may result in a credit to expense for that year. page 8 technical release 10',
35925:'fasab handbook, version 20 06/21 technical release 10 diagram 1: general approach to determining, estimating and recognizing asbestos cleanup costs',
35926:'circles correlate to sections of document page 9 technical release 10 fasab handbook, version 20 06/21 technical release 10 the',
35927:'provisions of this technical release need not be applied to immaterial items. page 10 technical release 10 fasab handbook, version',
35928:'20 06/21 technical release 10 appendixa: basis for conclusions background a1. in january2008,theaccounting andauditpolicycommitteeaapc, establishedthe general property, plant, & equipment',
35929:'gpp&e task force to assist in developing implementation guidance for federal gpp&e as it relates to sffas 6, accounting for',
35930:'pp&e, sffas 23, eliminating the category national defense property plant, & equipment, and other related gpp&e guidance developed by the',
35931:'fasab. the task force includes federal agency representatives who are experiencing gpp&e implementation issues and those who have gpp&e implementation',
35932:'best practices to share with the federal community. a2. theaapcgpp&etaskforcewasdividedinto four subgroups that will eachaddressa set of related issues. each',
35933:'subgroup meets separately on a regular basis to discuss its set of issues and report back to the full task',
35934:'force on its progress towards the development of implementation guidance. the four subgroups are: gpp&eacquisition gpp&e use gpp&e disposal gpp&e',
35935:'records retention a3. this guidance was developed by the disposal subgroup. the subgroup included members from the following federal agencies:',
35936:'department of defense department of energy department of the interior governmentaccountabilityoffice generalservicesadministration nationalaeronautics andspaceadministration recognition versus disclosure ofasbestos cleanup costs',
35937:'a4. an asbestos cost estimate is developed in accordance with the methodology outlined in tr 2 once the existence of',
35938:'the asbestos is determined. if the asbestos is probable, the entity must determine whether the costs can be reasonably estimated.',
35939:'asbestos cost estimates page 11 technical release 10 fasab handbook, version 20 06/21 technical release 10 rely on information such',
35940:'as the amount, type, and condition of asbestos in the property, the disturbance activity, and the federal, state and local',
35941:'asbestos regulations. this information is not always available due to: a absence of environmental or legal driver to track the',
35942:'existence of asbestos; b asbestos embedded in materials not visible through observation; and c changes in regulatory restrictions on the',
35943:'use of asbestos in materials. for purposes of developingasbestoscleanup costestimates, assumptionscan bemade insomecasesto makeupforalackofactualdata. whenreasonableassumptionsandassociatedestimates i.e. supported by industry best',
35944:'practices cannot be made, the presence of asbestos and theinabilityto reasonablyestimateanamount of thetotalcleanupcostsshouldbedisclosed in the agency’s notes to the financial',
35945:'statements. asbestos cleanup cost estimationapproach a5. cost estimates for future asbestos cleanup are dependent on information that is often not',
35946:'discovered until closer to initiation of a renovation or demolition project. as a result, cost estimates may be based on',
35947:'key assumptions that become more accurate as an asbestos cleanup project is planned. thus, the methodology presented offers several options',
35948:'for developing cost estimates depending on the availability of asbestos information i.e., cost modelforindividualorgroupedproperties, extrapolationofhistoricalcosts,propertyspecific cost estimate based on survey',
35949:'data. the methodology incorporates refinement of the cost estimate as better and relevant information becomes available over the life of',
35950:'the asset. once a renovation or disposal project is planned and detailed asbestos surveys are conducted as dictated by environmental',
35951:'regulation, environmental liabilities should more accurately reflect future asbestos cleanup costs. reasonable cost estimate a6. management is responsible for making',
35952:'the accounting estimates included in the financial statements. estimates are based on subjective as well as objective factors and, as',
35953:'a result, judgment is required to estimate an amount at the date of the financial statements. managementsjudgmentisnormallybasedonitsknowledgeandexperienceabout past and currenteventsanditsassumptionsabout',
35954:'conditionsit expectstoexistand coursesof action it expects to take. an entitys internal control may reduce the likelihood of material misstatements of',
35955:'accounting estimates. the entity should consider the following factors when developing a reasonable cost estimate: 1. accumulation of relevant, sufficient,',
35956:'and reliable data on which to base an accounting estimate. 2. preparation of the accounting estimate by qualified personnel. page',
35957:'12 technical release 10 fasab handbook, version 20 06/21 technical release 10 3. adequate review and approval of the accounting',
35958:'estimates by appropriate levels of authority, including: review of sources of relevant factors review of development of assumptions reviewofreasonablenessofassumptionsandresultingestimates. evaluate',
35959:'whether the assumptionsare consistent witheach other,the supporting data, relevant historical data, and industry data consideration of the need to use',
35960:'the work of specialists consideration of changes in previously established methods to arrive at accounting estimates consideration of changes in',
35961:'the business or industry that may cause other factors to become significant to the assumptions 4. comparison of prior accounting',
35962:'estimates with subsequent results to assess the reliability of the process used to develop estimates. 5. consideration by management of',
35963:'whether the resulting accounting estimate is consistent with the operational plans of the entity. a7. theaapc releasedtheexposuredrafted, implementation guidance on',
35964:'asbestos cleanup costs associated with facilities and installed equipment on september 3, 2009. upon release of the ed, notices and/or',
35965:'press releases were provided to: the federal register, the fasab news, the journal of accountancy, aga today, the cpa journal,',
35966:'government executive, the cpa letter, and committees of professional associations commenting on past exposure drafts. a8. nine letters were received',
35967:'from the following sources: federal internal nonfederal external users, academics, others 2 auditors preparers and financial managers 7 a9. aapc',
35968:'received a comment on the exposure draft requesting clarification on whether removal of asbestos could be classified as part of',
35969:'normal operations, when performed page 13 technical release 10 fasab handbook, version 20 06/21 technical release 10 during maintenance, repairs',
35970:'or alterations that occur over the life of the building, and therefore the cost of removal could be accounted for',
35971:'as an operating expense and not a liability. although the building maintenance and repair occurs periodically over the life an',
35972:'asset, any asbestos contained in a specific asset may not be periodically removed and/or contained at every scheduled repair and/or',
35973:'maintenance activity. therefore, the removal of asbestos should not be accounted for as a routine operating expense. further, in accordance',
35974:'with tb 20061, recognition and measurement of asbestosrelated cleanup costs, paragraph 30, “it is possible for certain types of nonfriable',
35975:'asbestoscontaining material to remain nonfriable indefinitely; therefore, the estimate does not need to include nonfriable asbestoscontaining roofing, flooring, siding, and',
35976:'other materials that when repaired, renovated, removed, contained, disposed of, or otherwise disturbed do not become friable and do not',
35977:'require additional costs above and beyond normal repair, renovation, removal, containment, or disposal costs to prevent them from becoming friable.',
35978:'however, if there are additionalcostsincurred toprevent the nonfriableasbestoscontaining material from becoming friable or if it could potentially become friable as',
35979:'part of the repair, renovation,removal, containment, ordisposalprocess, suchcostsshouldbe includedin the estimate of asbestosrelated cleanup costs.” appendix b: illustrations examples of',
35980:'practice the examples shown in this appendix are for illustrative purposes only. the explanations and illustrations are presented to show',
35981:'how the standards may be applied but are not standards themselves. these illustrations are general in nature and may not',
35982:'apply to specific cases that appear similar but have unique circumstances. the following examples illustrate the estimation of asbestosrelated clean',
35983:'up costs associated with future repair/renovation or demolition projects at the time the asset is placed in service i. evaluatingasbestos',
35984:'cleanupcostsassociatedwithrealpropertyrepair or renovation: afederal entity recognizes the potential to repair or renovate real property during the course of its operating',
35985:'life. for real property containing asbestos, the asbestos plan states that measures must be taken to contain and properly dispose',
35986:'of the asbestos if the materials become damaged or need to be removed. a. when the asset is placed into',
35987:'service or the entity first reports asbestos cleanup costs for a given real property, the following considerations may apply: page',
35988:'14 technical release 10 fasab handbook, version 20 06/21 technical release 10 an asbestos survey performed on the real property',
35989:'that requires repair indicates that the blownin attic insulation and the ceiling tiles contain asbestos. areviewofthefederalandstaterequirementsindicatethatregardlessof renovation or demolition method,',
35990:'the attic insulation and ceiling tiles will likely require removal in accordance with asbestos regulations. there is cost information available',
35991:'for removing, containing, and disposing of similar asbestoscontaining materials. b. based on the information above and in accordance with tr',
35992:'2, since asbestos containing materials are present, the probability requirement of recognizing a cleanup liability is satisfied. also, since there',
35993:'is information about the cost of removal, containment and disposal of the asbestos, the cost associated with asbestos cleanup is',
35994:'reasonably estimable. the federal entity must estimate the asbestosrelated cleanup costs to be incurred while conductingthe repairorrenovation,plusthe costofcleaningupthe asbestos remaining',
35995:'in the real property at the time of demolition, where reasonably estimable. these estimated costs would then be recognized as',
35996:'a liability according to the guidance in sffas 6, paragraph 104. ii. evaluatingasbestos cleanupcostsassociatedwithrealpropertydemolition: afederal entity acquires an asset that',
35997:'is suspected to contain asbestos. federal accounting standards require that federal entities estimate the liability associated with asbestos removal, containment,',
35998:'or disposal when the asset is placed in service. a. at the acquisition date, the following is determined: thereisnoevidenceorcertificationthattheassetisasbestosfree. assomeconstruction',
35999:'material utilized atthe time the assetwas built had been found to contain asbestos, it is therefore probable that asbestos may',
36000:'be present in the real property being assessed; the condition of materials suspected to contain asbestos was not surveyed by',
36001:'the previous owner; no asbestos survey or other assessment has been performed to estimate the type, location,or extent of asbestos',
36002:'in the real property; there are no assets that are similar in size, age and functionality that could be used',
36003:'to obtain information about the type, location, or extent of asbestos in the similar assets; therearenocurrentreliablefactorsorparameterstobeappliedtoa relevant asbestos liability estimation',
36004:'model; and page 15 technical release 10 fasab handbook, version 20 06/21 technical release 10 itisnotpossibletodeterminetheextentoftheexistenceofasbestos without destroying or weakening',
36005:'the existing structure or disturbing potential asbestos, which would be undesirable. b. based on the information above and in accordance',
36006:'with tr 2, the presence of asbestosintherealpropertysatisfiestheprobabilityrequirementof liability recognition. however, the cost of removal, containment, and disposal of the asbestosisnotreasonablyestimableatthistime.',
36007:'theexistenceofasbestos anda statement that such anestimate cannot be madeshould be disclosed. in this case, the federal entity must estimate a',
36008:'liability for conducting an asbestos survey and any other identifiable associated cost, recognize that liability in accordance with the guidance',
36009:'in sffas 6, paragraph 104, and disclose information about the real property in the notes to the financial statement. also,',
36010:'as relevant information about the real property and its asbestos become available, the federal entity should reconsider its key assumptionsand',
36011:'use an acceptable estimation technique i.e., cost model or similar real property to develop a reasonable estimate of asbestos cleanup',
36012:'costs. page 16 technical release 10 fasab handbook, version 20 06/21 technical release 11: implementation guidance on cleanup costsassociated with',
36013:'equipment status issued effective date affects affected by june 2, 2010 upon issuance none. none. summary this technical release is',
36014:'intended to address cleanup costs associated with equipment as it applies to sffas 1, 5, 6 and tr 2. the',
36015:'guide focuses on cleanup of hazardous waste associated with equipment. it focuses on when cleanup costs should be recognized as',
36016:'an environmental liability and when it should be expensed as a cost of routine operation. in addition the guide includes',
36017:'two examples – one example is associated with equipment cleanup when a liability should be recognized and one is associated',
36018:'with equipment cleanup when the costs should be expensed as routine operations. this technical release provides steps that can be',
36019:'followed to help federal entities consistently apply existing standards. the guidance will also assist federal entities to provide reasonable estimates',
36020:'of cleanup costs associated with the disposal of equipment assets, when required. page 1 technical release 11 fasab handbook, version',
36021:'20 06/21 technical release 11 table of contents page summary 1 scope 3 effective date 4 technical guidance 6 appendixa:basis',
36022:'for conclusions 11 appendix b: illustrations 14 appendix c:abbreviations 20 appendix d: glossary 21 page 2 technical release 11 fasab',
36023:'handbook, version 20 06/21 technical release 11 introduction purpose 1. in accordancewithstatement offederalfinancialaccountingstandardssffas6 paragraphs97and 98,cleanup coststhat occur when operationscease shallbeestimated',
36024:'when the associated asset is placed in service and a portion of estimated total cleanup costsshallberecognizedasexpenseduringeachperiodthattheassetisinoperation. the purpose of this',
36025:'technical release is to provide implementation guidance on cleanup costs associated with equipment.1 this technical release clarifies the accounting for',
36026:'cleanup costs associated with permanent or temporary closures, or shutdown of equipment2 i.e., when cleanup cannot occur until the end',
36027:'of the useful life or at regular intervals during that life. this technical release also clarifies the accounting for other',
36028:'cleanup costs associated with ongoing operations i.e., “routine”3 hazardous waste removal and disposal as outlined in sffas 6 paragraph 93.',
36029:'cost for hazardous waste that is cleaned up and managed routinely is accounted for in accordance with sffas 6 paragraph',
36030:'93 and the accounts payable provisions of the liability standards in sffas 1.4 scope 2. the guidance in this technical',
36031:'release relates to cleanup costs associated with equipment as defined by sffas 6 par. 85 87. 3. readers of this',
36032:'technical release should first refer to the hierarchy of accounting standards in sffas 34. this technical release supplements the relevant',
36033:'accounting standards, but is not a substitute for and does not take precedence over the standards. this technical releaseclarifies,butdoesnotchange, guidancepreviouslyprovidedinstatementoffederal',
36034:'financialaccounting standards sffas 1, accounting for selected assets and liabilities; sffas 5 accounting for liabilities of the federal government, sffas',
36035:'6 accounting for 1 equipment is defined inappendix d. 2 sffas 6par. 87: cleanup may include,but is not limited to,',
36036:'decontamination,decommissioning, siterestoration, site monitoring, closure, and post closure costs. 3 see definition inappendix d. 4 sffas 1 paragraph 74:accounts payable',
36037:'are amounts owed by a federal entity for goods and services received from, progress in contract performance made by, and',
36038:'rents due to other entities. page 3 technical release 11 fasab handbook, version 20 06/21 technical release 11 property, plant,',
36039:'and equipment, chapter 4: cleanup costs; and technical release tr 2 determining probable and reasonably estimable for environmental liabilities in',
36040:'the federal government. effective date 4. this technical release is effective immediately. background overview 5. sffas 6 chapter 4: cleanup',
36041:'costs applies only to cleanup costs from federal operations known to result in hazardous waste which the federal government is',
36042:'required to cleanup by federal, state and/or local statutes and/or regulations that have been approved as of the balance sheet',
36043:'date, regardless of the effective date of such statutes or regulations i.e., remove, contain or dispose of. these cleanup costs',
36044:'meet the definition of liability provided in sffas 5.5 due to the nature of the environmental liability and the timing',
36045:'associated with cleanup costs, additional guidance is provided in sffas 6 on the recognition of cleanup costs over the life',
36046:'of the related equipment. the sffas 6 guidance is required since cleanup generally does not occur until the end of',
36047:'the useful life of the equipment or at regularintervalsduring that life. other cleanup costs,suchasthoseresultingfrom accidents or where cleanup is an',
36048:'ongoing part of operations, are to be accounted for in accordance with the liability standards i.e., sffas 1 and sffas',
36049:'5 and are not subject to the recognition guidance provided in sffas 6, since the cleanup effort is not deferred',
36050:'until operation of associated equipment ceases either permanently or temporarily. 6. this technical release provides steps that can be followed',
36051:'to help federal entities consistently apply existing standards and ensure consistent, accurate and meaningful application of the standards. the guidance',
36052:'will also assist federal entities to provide reasonable estimates of cleanup costs associated with the disposal of equipment, when 5sffas',
36053:'6, paragraph 88: this standard applies only to cleanup costs from federal operations known to result in hazardous waste which',
36054:'the federal government is required by federal, state and/or local statutes and/or regulations that have been approved as of the',
36055:'balance sheet date, regardless of the effective date, to cleanup i.e., remove, contain or dispose of. these cleanup costs meet',
36056:'the definition of liability provided in sffas 5 [statement of recommended accounting standards no. 5, accounting for liabilities of the',
36057:'federal government sras no. 5]. page 4 technical release 11 fasab handbook, version 20 06/21 technical release 11 required. the',
36058:'identification and recognition of an environmental liability associated with equipment being decommissioned/ disposed is illustrated in diagram 1. relatedaccounting literature',
36059:'7. the related accounting standards are as follows: federalaccounting standardsadvisory board fasabaccounting standards: a. sffas 1, accounting for selected assets',
36060:'and liabilities b. sffas 5, accounting for liabilities of the federal government c. sffas 6, accounting for property, plant, and',
36061:'equipment d. technical release 2, determining probable and reasonably estimable for environmental liabilities in the federal government page 5 technical',
36062:'release 11 fasab handbook, version 20 06/21 technical release 11 technical guidance cleanup costsassociated with equipment at disposal 8. in',
36063:'accordance with sffas 6, the cleanup costs are the costs of removing, containing, and disposing of 1 hazardouswaste fromproperty, or2',
36064:'materialand/or propertythat consists of hazardous waste6 at permanent or temporary shutdown of the associated equipment asset. if the hazardous waste',
36065:'cleanup is unique to the equipment closure either temporarily or permanently, disposal, or decommissioning, then the cleanup costs, as defined',
36066:'above, shall be estimated when the associated equipment asset is placed in service. recognition of the expense and accumulation of',
36067:'the environmental liability shall begin on the date that the equipment asset is placed into service, continue in each period',
36068:'that operation continues, and be completed when the equipment asset ceases operation.7 aportion of estimated total cleanup costs shall be',
36069:'recognized as expense during each period that the equipment is in operation.8 9 in accordance with sffas 5, the liability',
36070:'is recognized when a future outflow or other sacrifice of resources as a result of past transactions or events is',
36071:'probable and reasonably estimable. in addition, tr 2 outlines several key factors tests that must be considered in determining whether',
36072:'a future outflow of resources from a federal entity for environmental cleanup is probable and can be reasonably estimable. example',
36073:'of practice cleanup costsassociated with equipment at disposal: determination of hazardous waste cleanup liability associated with equipment disposal at the',
36074:'time equipment is being placed in service. 6sffas 6paragraph86: hazardouswasteisasolid,liquid,or gaseous waste,or combinationofthese wastes,which because of its quantity, concentration, or',
36075:'physical, chemical, or infectious characteristics may cause or significantly contribute to an increase in mortality or an increase in serious',
36076:'irreversible, or incapacitating reversible, illness or pose a substantial present or potential hazard to human health or the environment when',
36077:'improperly treated, stored, transported, disposed of, or otherwise managed. 7 sffas 6 paragraph 98: recognition of the expense and accumulation',
36078:'of the liability shall begin on the date that the pp&e is placed into service, continue in each period that',
36079:'operation continues, and be completed when the pp&e ceases operation. 8sffas 6paragraph97: aportionof estimatedtotal cleanupcosts shallberecognizedas expense during each period',
36080:'that general pp&e is in operation. this shall be accomplished in a systematic and rational manner based on useof thephysicalcapacity',
36081:'of theassociatedpp&e e.g., expectedusablelandfill areawhenever possible. ifphysical capacity is not applicable or estimable, the estimated useful life of the associated',
36082:'pp&e may serve as the basis for systematic and rational recognition of expense and accumulation of the liability. 9 sffas',
36083:'6 paragraph 104 provides additional instructions for initial implementation of sffas 6 and for liabilities related to assets in service',
36084:'at the effective date of this standard. page 6 technical release 11 fasab handbook, version 20 06/21 technical release 11',
36085:'9. as the entity assesses the probability of future outflows of resources for environmental cleanup associated with the equipment disposal,',
36086:'the following factor should be considered. does the acquisition or any other relevant information e.g. operating records, experience with similar',
36087:'assets, etc. identify materials that are used or created within the process that would constitute a hazardous waste at disposal?',
36088:'if the future outflows of resources for environmental cleanup are not probable, then the criterion for recognition of a liability',
36089:'is not established.10 10. if the future outflows of resources for environmental cleanup are probable then the entity must assess',
36090:'whether the hazardous waste associated with the newly acquired equipment will be regulatedand/or managed the same asother routine operational waste',
36091:'i.e. routinely disposed using the same method at the federal facility, or will it be uniquely managed. 11. as the',
36092:'entity assesses the reasonable estimability of future outflows of resources for environmental cleanup related to equipment disposal, the entity should',
36093:'consider whether liability can be estimated for removing, containing, and/or disposing of the hazardous waste.11 12. if the future outflow',
36094:'of resources for environmental cleanup related to the equipment disposal are probable, and it is determined that the hazardous waste',
36095:'associated with the newly acquired equipment is not routinely removed and disposed during equipment operation; and the costs of removal',
36096:'or containment and/or disposal of the hazardous waste associated with disposal of the equipment can be reasonably estimated estimates may',
36097:'include a study, if required, then the requirement of equipment disposal cleanup liability recognition has been satisfied and the federal',
36098:'entity must recognize an environmental liability for these estimated costs in accordance with sffas 6, paragraph 98. see illustration in',
36099:'diagram 1.12 10 technicalrelease 2 establishes guidance for when costs associated with environmental damage meet the probable and reasonably estimable',
36100:'criteria. 11 sffas 6note 68: the unitofanalysisfor estimatingliabilitiescanvarybasedonthereportingentityandthenature of the transaction or event. the liability recognized may be the estimation',
36101:'of an individual transaction or event; or a group of transactions and events. for example, an estimate of thecleanup costs',
36102:'could be made on a facility by facility basis, or an entity by entity basis. 12 in accordance with sffas',
36103:'6, paragraph96, “estimates shall berevised periodically to account for material changes due to inflation or deflation and changes in regulations,',
36104:'plans and/or technology. new cost estimates should be provided if there is evidence that material changes have occurred; otherwise estimates',
36105:'may be revised through indexing.” as additional information becomes available, the agencies must reevaluate assumptions, revise cost estimates, and make',
36106:'necessary adjustments to the liability recognition. page 7 technical release 11 fasab handbook, version 20 06/21 technical release 11 cleanup',
36107:'costsassociated with equipment during ongoing operations 13. in accordance with sffas 6, paragraph 93,13 if such cleanup is an ongoing',
36108:'part of operations, the costs are to be accounted for in accordance with liability standards outlined in sffas 1 and',
36109:'are not subject to the recognition guidance provided in sffas 6, chapter 4 paragraphs 97 and 98. any accrued liability/payable',
36110:'and associated operating expense should be recognized in the period the cleanup occurs as part of ongoing operations. 14. in',
36111:'many cases, hazardous wastes removed and disposed at decommissioning, shutdown and/or disposal of equipment arethe sameasthose managed aspart of theperiodicroutine',
36112:'maintenance and daytoday operations, as determined by the regulatory requirements and method of managing the waste. for instance, the costs',
36113:'of removing and disposing of hazardous waste e.g., batteries, cleaning solvents, motor oil incurred as part of periodic routine maintenance',
36114:'of equipment over its useful life, are generally expensed and the associated liability/payable is recognized as the costs are incurred.',
36115:'the cost of removing and disposing of the same routine maintenance hazardous waste at the time of equipment disposal would',
36116:'likewise be expensed and associated liability is recognized when incurred. example of practice cleanup costsassociated with equipment during ongoing operations:',
36117:'determination of hazardous waste cleanup during ongoing operations of the equipment routine hazardous waste disposal at the time the equipment',
36118:'is being placed in service. 15. as the entity assesses the probability of future outflows of resources for environmental cleanup',
36119:'related to the equipment, the following factor should be considered. does the acquisition or any other relevant information e.g. operating',
36120:'records, experience with similar assets, etc. identify materials that are used or created within the process that would constitute a',
36121:'hazardous waste at disposal? if the probability of future outflows of resources for environmental cleanup is not met, then the',
36122:'criterion for recognition of a liability is not established.14 16. if the future outflows of resources for environmental cleanup are',
36123:'probable, then the entity must assess whether the hazardous waste associated with the newly acquired equipment will be regulated and/or',
36124:'managed the same asother routine operational wasteat the federal facility or will it be uniquely managed. 13 sffas 6paragraph93: othercleanupcosts,suchasthoseresultingfromaccidentsorwherecleanupisanongoing',
36125:'part of operations, are to be accounted for in accordance with liability standards and are not subject to the recognition',
36126:'guidance provided in this standard. this guidance does not apply to these other types of cleanup since the cleanup effort',
36127:'is not deferred until operation of associated pp&e ceases either permanently or temporarily. 14 technicalrelease 2 establishes guidance for when',
36128:'costs associated with environmental damage meet the probable and reasonably estimable criteria. page 8 technical release 11 fasab handbook, version',
36129:'20 06/21 technical release 11 17. if the future outflows of resources for environmental cleanup related to the equipment disposal',
36130:'are probable and it is determined that the hazardous waste associated with the newly acquired equipment is regulated and/or managed',
36131:'the same as other routine operational wastes, then the costs of removal, containment and/or disposal of the routine wastes associated',
36132:'with disposal of this equipment asset are to be recognized, in accordance with the liability standards, in the period that',
36133:'the removal, containment and/or disposal of routine wastes occurs. these costs are not subject to the recognition guidance provided in',
36134:'sffas 6, paragraph 98. see illustration in diagram 1 below. page 9 technical release 11 fasab handbook, version 20 06/21',
36135:'technical release 11 diagram 1: recognizing environmental liabilities for equipment disposal in compliance with technical release 2 and sffas 1,',
36136:'5 and 6 circles correlate to sections of document the provisions of thistechnical release need not be applied to immaterial',
36137:'items. page 10 technical release 11 fasab handbook, version 20 06/21 technical release 11 appendixa: basis for conclusions a1. in',
36138:'january2008,theaccounting andauditpolicycommitteeaapc establishedthe general property, plant, & equipment gpp&e task force to assist in developing implementation guidance for federal gpp&e',
36139:'as it relates to sffas 6, accounting for pp&e, sffas 23, eliminating the category national defense property plant, & equipment,',
36140:'and other related gpp&e guidance developed by the fasab. the task force includes federal agency representatives who are experiencing gpp&e',
36141:'implementation issues and those who have gpp&e implementation best practices to share with the federal community. a2. the gpp&e task',
36142:'force was divided into four subgroups that will address a set of related issues. thesubgroupsmeetseparatelyonaregularbasistodiscusstheirsetofissuesand report back to the full',
36143:'task force on its progress towards the development of implementation guidance. the four subgroups are gpp&eacquisition gpp&e use gpp&e disposal',
36144:'gpp&e records retention a3. this guidance was developed by the disposal subgroup. the subgroup included members from the following federal',
36145:'agencies: department of defense department of energy department of the interior governmentaccountabilityoffice generalservicesadministration nationalaeronautics andspaceadministration the subgroup included accountants, program',
36146:'managers, and functional pp&e experts. the program managers gave the subgroup the perspective of how the standards come into play',
36147:'on a daytoday basis. a4. the scope of the implementation guidance is to address cleanup costs associated with equipment as',
36148:'it applies to sffas 1, 5, 6 and tr 2. the technical release focuses on when to recognize cleanup of',
36149:'hazardous waste associated with equipment as an environmental liability and when to expense as a routine operational cost. the technical',
36150:'release is separated into two sections – one addressing when sffas 1 should be applied and the other when sffas',
36151:'6 should be applied. in addition, the technical release includes two page 11 technical release 11 fasab handbook, version 20',
36152:'06/21 technical release 11 examples – one example is associated with hazardous waste cleanup not routinely managed and disposed of,',
36153:'which includes liability recognition e.g., pcb removal and disposalduring ship decommissioning andthe otherexample isassociated with hazardous waste cleanup routinely managed',
36154:'and disposed of, which includes expensing of the costs being accounted for as an operational expense e.g., removal of dry',
36155:'cleaning solvents. a5. this technical release provides steps that can be followed to help federal entities consistently apply existing standards',
36156:'to assist in providing consistent, accurate and meaningful information. a6. in january 2009 the disposal subgroup of the gpp&e task',
36157:'force presented a draft equipmentcleanupissuepapertotheaapcforreview. thecommitteeaskedthesubgroup to better clarify when the equipment cleanup cost should be recognized as a liability',
36158:'and when the costs should be expensed as routine operations. the committee also asked the subgroup to include an additional',
36159:'example in the technical release for a naval ship to show the distinction between thedisposal of hazardous waste duringthe normal',
36160:'operationsof the ship and the disposal of hazardous waste unique to decommissioning the ship. in may the subgroup returned to',
36161:'theaapc with a revised version of the implementation guidance that included the requested clarifications as well as the ship example.',
36162:'the members provided some additional commentsto the subgroup on the technical release and agreed to reviewa preballot exposure draft of',
36163:'the guidance before the julyaapc meeting and then have a ballot exposure draft available at the july meeting. a7. theaapc',
36164:'releasedtheexposuredrafted, implementation guidance on cleanup costs associated with equipment on september 3, 2009. upon release of the ed, notices and/or',
36165:'press releases were provided to: the federal register, the fasab news, the journal of accountancy, aga today, the cpa journal,',
36166:'government executive, the cpa letter, and committees of professional associations commenting on past exposure drafts. a8. ten letters were received',
36167:'from the following sources: federal internal nonfederal external users, academics, others 2 auditors preparers and financial managers 8 page 12',
36168:'technical release 11 fasab handbook, version 20 06/21 technical release 11 a9. aapc received a comment on the exposure draft',
36169:'requesting clarification on financial transactions and reporting requirements for cleanup costs associated with permanent versus temporary shutdown of the asset.',
36170:'further, the respondent requested the exposure draft to be changed to only report cleanup costs associated with permanent shutdown of',
36171:'equipment. sffas 6 paragraph 8515 requires reporting of cleanup costs associated with bothtemporaryandpermanentshutdown of assets. inaddition,theaapcgpp&e, disposal subgroup is in',
36172:'the process of defining triggering events and associated financial transactions for permanent and temporary shutdown and/or closure of gpp&e. additional',
36173:'guidance related to financial transactions and accounting for cleanup costs at the time the asset is permanently and/or temporarilyclosed and/or',
36174:'shutdown will be provided as a result of that effort. 15 cleanup costs are the costs of removing, containing, and/or',
36175:'disposing of 1 hazardous waste from property, or 2 material and/or property that consists of hazardous waste at permanent or',
36176:'temporary closure or shutdown of associated pp&e. page 13 technical release 11 fasab handbook, version 20 06/21 technical release 11',
36177:'appendix b: illustrations the examples shown in this appendix are for illustrative purposes only. the explanations and illustrations are presented',
36178:'to show how the standards may be applied but are not standards themselves. these illustrations are general in nature and',
36179:'may not apply to specific cases that appear similar but have unique circumstances. example 1: decommissioning of used perchloroethylene dry',
36180:'cleaning equipment adry cleaning operation uses the hazardous material perchloroethylene perc. perc is a colorlessliquidwithmildodorusedprimarilyasadrycleaningsolvent. percishighlyvolatile;8085% of the chemical used',
36181:'annually is released into the atmosphere with only 1% to water. the greatest health risk presented by perc is inhalation',
36182:'by industry workers. studies of industry workers indicate a “probable” linkage between prolonged exposure and certain cancers. drycleaners typically recycle',
36183:'used solvent onsite which creates several hazardous wastes. although the quantities of waste have been greatly reduced through recycling, hazardous',
36184:'waste will continue to be removed and disposed as long as the hazardous solvent is used in the operation. in',
36185:'addition, leaks and spills represent a significant potential environmental hazard. table 1 presents the hazardous waste removed and disposed of',
36186:'from dry cleaning operations throughout the life of the asset and at decommissioning. the second and third columns of the',
36187:'table list the regulatory categorization i.e., epahazardous waste code, and method for managing the waste, respectively. the fourth column indicates',
36188:'if the hazardous waste is page 14 technical release 11 fasab handbook, version 20 06/21 technical release 11 regulated and',
36189:'managed in a manner that is routine to the operations or unique to decommissioning and disposing of the equipment at',
36190:'the end of its useful life. table 1. hazardous waste from dry cleaning operations and decommissioning waste epahw code waste',
36191:'management method routine/ unique accounting practice rationale spent solvent f0021 , d0392 reuse/recycl e onsite or ship to tsdf3 routine',
36192:'operational expense sffas 1 reuse/recycle exempts waste or same waste/mgmt as operational used filter cartridges f002, d039 ship to tsdf',
36193:'routine operational expense sffas 1 same waste/mgmt as operational distillation residues f002, d039 ship to tsdf routine operational expense sffas',
36194:'1 same waste/mgmt as operational cooked powder residues f002, d039 ship to tsdf routine operational expense sffas 1 same waste/mgmt',
36195:'as operational unused perc d039 reuse/recycl e onsite or return to distributor routine operational expense sffas 1 reuse/recycle exempts waste',
36196:'wastewater from equipment cleaning f002, d039 ship to tsdf routine operational expense sffas 1 same waste/mgmt as operational key: 1f002:',
36197:'represents waste containing the class of solvent that includes perchloroethylene. 2d039: represents waste containing the specific solvent, perchloroethylene. 3tsdf: facilitypermittedfortreatment,storage,',
36198:'anddisposalofrcrahazardouswaste. all hazardous waste from this equipment falls under the same regulatory requirements f002, d039 and waste management method ship',
36199:'to tsdf, or it is recycled and not disposed as a hazardous waste. the hazardous waste removed at decommissioning is',
36200:'the same as waste page 15 technical release 11 fasab handbook, version 20 06/21 technical release 11 from ongoing operationsand',
36201:'managed the same, asdetermined bythe regulatory requirements. thus, the cost associated with removal and disposal of the waste produced at',
36202:'decommissioning is recognized as a liability/payable and operational expense in the period incurred in accordance with the guidance provided in',
36203:'sffas 6, paragraph 93 and sffas 1. references: 1. rcrainfocus: drycleaning, epa530k99005,june,1999. 2. proper disposal of used perc dry cleaning',
36204:'equipment, environmental facilities corp,april, 2002. 3. apollution prevention guide for the dry cleaning industry, delaware department of natural resources and',
36205:'environmental control, www.dnrec.state.de.us/deldrycl.htm example 2: ship disposal the disposal of ships belonging to federal agencies is a significant event within',
36206:'asset lifecycle management. extensive planning and acquisition of services is required to prepare for the retirement of these largescale assets.',
36207:'ship disposal may occupy 6 months to 1 year scheduling time of the shipyard’s drydock space. removal of hazardous materials',
36208:'from the ship requires careful planning since the presence of water in and around the ship provides a transport media',
36209:'for hazardous materials to the environment and for human exposure. in the late 1990’s, the u.s. navy conducted a pilot',
36210:'study to evaluate the feasibility and cost associated with retiring ships, focusing on processes and costs for hazardous material removal.',
36211:'fourseparate contractorsperformed completeshipdisposal, usingcustomized processesandin accordance with the environmental regulatory standards of their respective states. tables 2 and 3 present',
36212:'the waste streams managed during the disposal operation and identify whether the waste regulation and management is operationally routine or',
36213:'unique to the disposal process. thefifthcolumnindicatesifthecostsshouldbeaccruedasaliabilityoverthelifeofthe asset i.e., estimated at the time the asset is placed into service and recognized',
36214:'over the life of the asset in accordance with sffas 6, paragraph 98, or expensed and recorded as a payable',
36215:'when the cost is incurred in accordance with sffas 1. the tables present high and low volume wastes, respectively, based',
36216:'on the experience of the contractors from the study. page 16 technical release 11 fasab handbook, version 20 06/21 technical',
36217:'release 11 table 2. high volume/cost waste streams waste source of waste waste management method routine/ unique accounting practice rationale',
36218:'asbestospipe and hull disposal in unique accrued liability unique containing insulationand acm approved sffas 6, operation and materials cloth, liner,',
36219:'landfill16 paragraph 98 disposal of acm mastic, plastic foam, gaskets regulated waste. pcb cable pcb removal unique accrued unique containing',
36220:'coatings, felt under tsca; liabilitysffas operation and waste backing, paint, rubber products disposal as solid or tsca regulated waste.17 6,paragraph98',
36221:'disposal; tsca18 requires pcb removal from metal prior to further processing. wasteoil fuel, lube oil, recover and routine operational recovery',
36222:'of petroleum hydraulic oil recycle. expense useful products sffas 1 materials e.g., metal, fuel is not a liability. 16one contractor',
36223:'disposed electrical cables with asbestoscontaining sheathings in their entirety, thereby greatly increasingthevolumeofacm waste. others removedthesheathings to recycle the copper cables.',
36224:'also, some managed all thermal insulation asacm rather than sample to determine exact amounts. 17contractorsin states thatdid notadoptepa’s pcb “megarule”',
36225:'needtosampleanddisposeallpcb wasteastsca regulated waste. other states that did adopt the rule allow disposal of pcb bulk product waste bpw in',
36226:'a nonhazardous solid waste landfill. 18toxic substancecontrolact tsca effective1/1/77authorizes epatocontrol any substancethat was determined to cause unreasonable risk to public',
36227:'health or the environment. page 17 technical release 11 fasab handbook, version 20 06/21 technical release 11 table 3. low',
36228:'volume/cost waste streams waste source of waste waste management method routine/ unique accounting practice rationale mercury fluorescent light tubes, fire',
36229:'detectors, tank level indicators universal waste recycling. routine operational expense sffas 1 routine recycling. rcra hazardous paint coatings on metal',
36230:'ship transducers, ballast, paint coatings transferred to scrap metals recycler, rcra exempt. routine operational expense sffas 1 routine recycling of',
36231:'useful materials. equipment with rcra hazardous materials contained in equipment saleandreusewith disclosure to buyers routine operational expense sffas 1 recovery',
36232:'of useful materials e.g., metal,fuel is not liability. cfcs small refrigerators, water coolers, small freezer units saleorreuse; cfc recycled by',
36233:'authorized subcontractor. routine operational expense sffas 1 routine recycling. note to tables 2 & 3: estimated costs associated with two',
36234:'of the high volume wastes i.e., pcb and asbestos containing wastes from ship decommissioning and disposal should be accrued as',
36235:'a financial liability over the asset’s useful life as they are nonroutine wastes not otherwise managed over the life of',
36236:'the asset. costs associated with the remainder of the wastes would be accounted for as operational expense in the period',
36237:'incurred in accordance with the guidance provided in sffas6,paragraph93andsffas1. thesewastesareeitherroutinelyrecycledmaterialsdue to their inherent value e.g., fuel, oil, cfcs, sold, or',
36238:'routinely disposed as universal waste e.g., fluorescent lights, batteries, gauges. however, as stated upfront in this example, ship decommissioning is',
36239:'a unique operation due to increased risk and need for specialized services and space. in addition, the environmental costs incurred',
36240:'by individual contractors vary due to factors such as state and local regulation, page 18 technical release 11 fasab handbook,',
36241:'version 20 06/21 technical release 11 technical approach to ship disposal, and waste identification and management processes. as a result,',
36242:'the federal agency’s management will likely need to make environmental liability determinations based on planned disposal operations for the asset',
36243:'or group of assets, using the examples provided in this document as a guide. page 19 technical release 11 fasab',
36244:'handbook, version 20 06/21 technical release 11 appendix c:abbreviations acm asbestos containing material carc chemicalagent resistant coating cfc chlorofluorocarbon pcb',
36245:'polychlorinated biphenyl perc perchloroethylene rcra resource conservation and recoveryact tsca toxic substances controlact tsdf treatment storage disposal facility page 20',
36246:'technical release 11 fasab handbook, version 20 06/21 technical release 11 appendix d: glossary environmental liability an environmental liability is',
36247:'a probable, measurable and reasonably estimable future outflow or expenditure of resources that exist as of the financial reporting date',
36248:'for environmental cleanup costs resulting from past transactions or events. equipment equipment is any tangible, nonexpendable, personal property having a',
36249:'useful life of more than one year and an acquisition cost of $5,000 or more per unit. 34 cfr 80.3.',
36250:'probable that which can reasonably be expected or believed to be more likely than not on the basis of available',
36251:'evidence or logic but which is neither certain nor proven. fasab consolidated glossary 2009. reasonably estimable the ability to reliably',
36252:'quantify in monetary terms the outflow of resources that will be required. tr 2 routine hazardous waste disposal disposal of',
36253:'hazardous waste that is regulated and managed the same as hazardous waste disposed of from daytoday operations and on a',
36254:'regular basis. useful life the normal operating life in terms of utility to the owner. fasab consolidated glossary 2009 page',
36255:'21 technical release 11 fasab handbook, version 20 06/21 technical release 12:accrual estimates for grant programs status issued august 4,',
36256:'2010 effective date for fiscal periods beginning after september 30, 2010. affects none. affected by none. summary thistechnicalreleaseaddressesmaterialityconsiderations,riskassessment, andproceduresfor estimating',
36257:'accruals for grant programs, including acceptable procedures until sufficient relevant and reliable historical data is available for new grant programs',
36258:'or changes to existing programs. this technical release also provides guidance on acceptable sources of documentation for grant accrual estimates;',
36259:'internal controls, including monitoring of internal controls and validation of grant accrual estimates; training of grantees; and monitoring of grantee',
36260:'reporting. page 1 technical release 12 fasab handbook, version 20 06/21 technical release 12 table of contents page summary 1',
36261:'scope 3 effective date 3 technical guidance 5 definitions 5 appendixa:basis for conclusions 14 appendix b:illustrative decisiontree diagrams for developing',
36262:'andvalidatinggrantaccruals 17 appendix c: relevant citations of existing guidance 20 appendix d:aapcgrantsaccountingtaskforce 23 page 2 technical release 12 fasab handbook,',
36263:'version 20 06/21 technical release 12 introduction purpose 1. aseriesofroundtablesinapril2009indicatedthatguidancefor estimatingaccruals for grant programs would be helpful for agencies. specifically,',
36264:'agencies indicated a need for guidance that describes a costeffective framework for developing reasonable estimates of accrued grant liabilities. scope',
36265:'2. this technical release tr applies to grants1 that are paid by a federal entity to a nonfederalentity. thistrdoesnotapplytocontractsorotherpurchasesofgoodsorservices. thistr',
36266:'does not establish new reporting requirements. thistr does not affect reporting in the budget of the united states or specialpurpose',
36267:'reports such asthose required by lawor regulation to be prepared in accordance with guidance other than generally accepted accounting principles.',
36268:'effective date 3. this technical release is effective for periods beginning after september 30, 2010, with earlier implementation encouraged. 1terms',
36269:'first appearing in bold are defined in the glossary. page 3 technical release 12 fasab handbook, version 20 06/21 technical',
36270:'release 12 background overview 4. this tr addresses materiality considerations, risk assessment, and procedures for estimating accruals2 for grant programs,',
36271:'including acceptable procedures until sufficient relevant and reliable historical data is available for new grant programs or changes to existing',
36272:'programs. this tr also provides guidance on acceptable sources of documentation for grant accrual estimates; internal controls, including monitoring of',
36273:'internal controls and validation of grant accrual estimates; training of grantees; and monitoring of grantee reporting. relatedaccounting literature 5. relatedaccountingstandardsarelistedbelow.',
36274:'relevantexcerptsareprovidedin appendix c: relevant citations of existing guidance. a. statement of federal financialaccounting standards sffas 1, accounting for selected assets',
36275:'and liabilities, b. sffas 3, accounting for inventory and related property, c. sffas 5, accounting for liabilities of the federal',
36276:'government, d. sffas 21, reporting correction of errors and changes in accounting principles, amendment of sffas 7, accounting for revenue',
36277:'and other financing sources e. statement of federal financialaccounting concepts sffac 5, definition of elements and basic recognition criteria for',
36278:'accrualbasis financial statements 2agencies must recognize and report balances due to or advanced to grantees at the end of the',
36279:'reporting period. adjustments are needed to provide for eligible expenses that grantees have incurredas of the reporting date but have',
36280:'not yet reported to the agencies. since these adjustments are based upon estimates, they are referred to as “accrual estimates”',
36281:'in this guidance. in particular: advances:amounts issuedas advances mustbeadjusted,evenifgrantees havenotyet reported expenses incurred. see sffas 1, accounting for selected assets',
36282:'and liabilities, par. 5759. accountspayable:wherethereisnoadvanceornoremainingadvance,agenciesmustestimateamountspayable to grantees. see sffas 5, accounting for liabilities of the federal government, par. 2425. page',
36283:'4 technical release 12 fasab handbook, version 20 06/21 technical release 12 technical guidance definitions 6. grants: 31 usc section',
36284:'6304 defines grants as follows:an executive agency shall use a grant agreement as the legal instrument reflecting a relationship between',
36285:'the united states government and a state, a local government, or other recipient when 1 the principal purpose of the',
36286:'relationship is to transfer a thing of value to the state or local government or other recipient to carry out',
36287:'a public purpose of support or stimulation authorized by a law of theunitedstatesinsteadof acquiringbypurchase,lease,orbarterpropertyorservicesfor thedirectbenefit or useof theunited statesgovernment; and',
36288:'2 substantialinvolvement is not expected between the executive agency and the state, local government, or other recipient when carrying out',
36289:'the activity contemplated in the agreement.3 materiality considerations and riskassessment 7. sffas 3, paragraph 14, states that “the accounting and',
36290:'reporting provisions of…standards should be applied to all items that would influence or change the users’ judgment of the entity’s',
36291:'efficiency and effectiveness and its compliance with laws and regulations in a material manner.”4 in particular, management should consider the',
36292:'materiality of the grant program relative to the agency’s statement of net cost. 8. the following list includes some of',
36293:'the factors that management should consider in determining which grant programs may have a higher risk of material misstatement that',
36294:'might cause financial statement users to make incorrect assessments regarding the efficiency and effectiveness of the program: a. thedegreeofvariancebetweenpastestimatesandtheprogram’sactualoperatingcost if',
36295:'applicable 331 usc section 6302 excludes the following from the definition of a grant agreement: agreements under which is provided',
36296:'only a direct united states government cash assistance to an individual; b a subsidy; c a loan; d a loan',
36297:'guarantee; or e insurance. 4 sffas 3, paragraph 14. seeattachment 1 for the full discussion of materiality from sffas 3.',
36298:'page 5 technical release 12 fasab handbook, version 20 06/21 technical release 12 b. significant findings reported in past program',
36299:'audits if applicable c. the age of the program other factors being equal, mature programs may have less risk than',
36300:'newer programs d. congressional and other public policy interest in a given program 9. for grant programs that are immaterial',
36301:'to the statement of net cost and/or that have a lower risk of misstatement, management might consider validating estimates less',
36302:'frequently. 10. managementshouldapplycostbenefitconsiderationstotheprocessofestimatingaccruals for grant programs. preparingaccrual estimates for grant programs 11. preparing reliable and timely accrual estimates for grant',
36303:'programs must be a joint effort between the budget, financial, and program offices at each agency. these offices should worktogether',
36304:'toensure that the proceduresand internalcontrolrecommendations5outlined in this tr are implemented and operating as designed. however, some agencies may not be',
36305:'able to effectively implement all of these procedures, because they have not yet developedthenecessarydatastoresand/ormethodsforpreparinggrantaccrualestimates. therefore, until sufficient relevant historical information',
36306:'on grant programs is available, the alternatives outlined in this tr should be utilized for developing grant accrual estimates. 12.',
36307:'agencies should document and maintain support for the data and assumptions used to develop grant accrual estimates. the documentation will',
36308:'facilitate the agency’s review of the assumptions, a key internal control, and will also facilitate the auditor’s testing of the',
36309:'estimates. documentation should be complete and stand on its own, i.e., a knowledgeable independent person could perform the same steps',
36310:'and replicate the same results. if the documentationwerefroma sourcethat wouldnormallybedestroyed, thencopiesshould be maintained in the file for the purpose of',
36311:'reconstructing the estimates. 5 internal control is an integral component of an organization’s management that provides reasonable assurance regarding the',
36312:'achievement of reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations. internal control consists of',
36313:'the control environment, risk assessment, control activities, information and communications and monitoring. source: summarized from internal control integrated framework, issued',
36314:'by the committee of sponsoring organizations coso, consisting of theamerican institute of cpas aicpa, the institute of managementaccountants ima, the',
36315:'institute of internalauditors iia, financial executives international fei, and theamericanaccountingassociation aaa. see http://www.aicpa.org/audcommctr/toolkitsnpo/internalcontrol.htm accessed 3122010 page 6 technical release 12',
36316:'fasab handbook, version 20 06/21 technical release 12 13. for both existing grant programs and new or modified grant programs,',
36317:'management’s documentation of relevant program design factors may include: a. program definition including legislation b. legislation or regulations changing the',
36318:'terms, maximum grant amount, total program size, or characteristics of the grantee population c. program eligibility requirements d. grant agreements',
36319:'detailing the terms and conditions of the grants preparingaccrual estimates for existing mature grant programs 14. agencies must accumulate sufficient',
36320:'relevant and reliable data on which to base accrual estimates. each agency should prepare grant accrual estimates based upon the',
36321:'best available data at the time the estimates are made. guidance on the types of supporting documentation of procedures that',
36322:'are acceptable for existing mature grant programs is found in paragraphs 13 and15 of this document. 15. for existing programs,',
36323:'management should ensure that adequate documentation is available for accrual estimates relating to existing grant programs. typical support documentation may',
36324:'include: a. procedures used for calculating the estimate b. documentation for the review and approval process for the estimate c.',
36325:'support for the calculation of the estimate, including the underlying assumptions used d. historical data supporting the assumptions e. relevant',
36326:'documentation of supporting actual cash and/or accrual experience including the date and source of reports, whether grantees reported on a',
36327:'cash or accrual basis, and how recently the data were updated. the documentation may include: i. historical data and trends,',
36328:'citing sources of information and relevant time frame ii. an analysis that identifies the most critical factors iii. trend analysis',
36329:'developed from reports from the accounting or program management systems page 7 technical release 12 fasab handbook, version 20 06/21',
36330:'technical release 12 iv. evidence of experience by other agencies with similar programs v. evidence of emergencies or legislated changes,',
36331:'such as changes in program terms, program size, or characteristics of grant recipients vi. evidence of other relevant factors that',
36332:'may be identified by grant program managers f. explanation of any sampling process used, including, if applicable, treatment of grant',
36333:'programs with different payment patterns, and/or legislation g. explanation of the calculation concept used, such as simple linear regression, statistical',
36334:'analysis, or other appropriate method h. procedures for error checking, including procedures to validate the completeness and accuracy of the',
36335:'underlying data used in preparing the accrual estimate i. procedures for monitoring/validation subsequent to the end of the reporting period',
36336:'preparingaccrual estimates for new grant programs or changes to existing grant programs 16. in the absence of sufficient relevant and',
36337:'reliable historical data on which to base accrual estimates, agencies should prepare estimates based upon the best available data at',
36338:'the time the estimates are made. paragraphs 13 and 19 of this document provide guidance on acceptable types of supporting',
36339:'documentation. 17. in certain limited instances, informed opinion may be used to support grant accrual estimates in the absence of',
36340:'sufficient relevant and reliable historical data. informed opinion refers to the judgment of agency staff or others who make estimates',
36341:'based on their programmatic knowledge and/or experience without using a fully satisfactory information storeand,insomecases,withoutusinganeconometricorotherstatisticalmodel. informed opinion may be used only',
36342:'as a last resort when relevant and reliable historical data and/or modeling capabilities are not available. this could occur when',
36343:'a new program has been established or when the congresshas changed an existing program in waysthat cannot be represented by',
36344:'historical data. informed opinion should therefore be used as an interim method only, and the agency should develop an action',
36345:'plan to establish an information store, appropriate models, and supporting documentation. 18. if an expert is used, the expert’s qualifications,',
36346:'such as professional or academic certification or length and kind of experience, must be assessed. the basis of the stated',
36347:'opinion must be articulated and documented in sufficient detail to allow review and page 8 technical release 12 fasab handbook,',
36348:'version 20 06/21 technical release 12 validation by independent sources, including independent auditors. for example, a statistician may be best',
36349:'qualified to determine the appropriate model for grant accrual estimates using limited or imperfect data. 19. management should ensure that',
36350:'adequate documentation is available for grant accrual procedures for new programs or changes to existing programs that do not have',
36351:'historical supporting documentation. in the absence of relevant and reliable historical experience as the support for estimates, the agency should',
36352:'document the basis for accrual estimates. typical support may include: a. relevant experience from other programs within the reporting agency',
36353:'or programs at other agencies, including documentation of why another agency’s experience is relevant, as well as similarities and differences',
36354:'particularly possible biases between the other agency’s experience and the new programs or changes to existing programs of the agency',
36355:'relying on the experience of the other agency b. extrapolation from subsets of prior program activity, e.g., while prior grants',
36356:'were not specifically targeted to a certain pool of grantees, it may be possible to identify prior activity with grantees',
36357:'with the same or similar characteristics to the targeted pool c. information from program managers regarding grantee activity and spending',
36358:'patterns 20. when expert opinion is used as an interim measure, the agency should document the expert’s qualifications, such as',
36359:'professional or academic certification or length of experience,aswellasthebasisforthestatedopinion. inaddition,thefollowingdocuments should be maintained in support of the expert’s opinion: i. reports',
36360:'and studies on relevant issues ii. minutesfrominternalmeetingsandotherrelevantcommunicationsdescribingthe basis for any assumptions or changes in assumptions 21. an illustrative decision tree',
36361:'diagram of the grant accrual process is displayed in figure 1 of appendix b: illustrative decision tree diagrams for developing',
36362:'and validating grant accruals. internal controls: developing grantaccrual estimates 22. management should ensure that adequate internal control procedures are in',
36363:'place. procedures in place should ensure that grant accrual estimates are based on historical transactions in previous years to the',
36364:'extent that relevant and reliable historical data exists. page 9 technical release 12 fasab handbook, version 20 06/21 technical release',
36365:'12 23. documented procedures are important to communicate relevant information on the grant accrual estimation to employees and management as',
36366:'well as other interested parties, such as auditors. as an agency experiences employee turnover, these documented procedures can providevital information',
36367:'fornew employeeson how to completereliable, wellsupported grant accrual estimates. such documentation may be used to establish consistent procedures for developing',
36368:'grant accrual estimates across grant programs with similar characteristics. 24. internal control documentation may include: a. documentation of the procedures',
36369:'and flow of information used in developing grant accrual estimates, e.g., flow chart with supporting narrative b. a discussion of',
36370:'who is responsible for each step of the estimate as well as the review and approval process followed c. the',
36371:'models used, the rationale for selecting the specific methodologies, and, for programs with sufficient historical data, the degree of calibration',
36372:'within the projected spending models6 d. the sources of information, the logic flow, and the mechanics of the models, including',
36373:'the formulas and other mathematical functions e. detailed subsidiary accounting records by grant program f. an audit trail from individual',
36374:'transactions to the subsidiary ledgers to the general ledger g. an assessment of the impact of changes in law or',
36375:'regulations on the reliability of estimates and should ensure that the grant accrual estimate model reflects these changes h. an',
36376:'assessment of the impact of subsequent events on the entity’s grant accrual estimates some subsequent events may require adjustments to',
36377:'the financial 6 calibration is the degree of precision within the model, i.e., the model’s ability to accurately predict the',
36378:'trends of expensesincurredforagivengrantprogram. thedegreeofcalibrationwithinthemodelcanbedocumentedbycharts or graphs showing projected expenses incurred versus the actual expenses incurred by reporting period. this document',
36379:'would analyze the variance between projected and actual expenses incurred by grantees. page 10 technical release 12 fasab handbook, version',
36380:'20 06/21 technical release 12 statements while others may require disclosure in the notes to the financial statements.7 i. a',
36381:'trend analysis of grant accrual estimates from year to year, and results of investigations of unusual fluctuations that are identified',
36382:'monitoring internal controls 25. management should monitor controls to determine whether they are operating as intended andthattheyaremodifiedasappropriateforchangesinconditions. monitoringisaprocess that assesses',
36383:'the quality of internal controls performance over time. the office of management and budget omb circulara123, management’s responsibility for internal',
36384:'control, is issued under the authority of the federal managers’ financial integrityact fmfia of 1982 and provides guidance to federal',
36385:'managers on improving the accountability, efficiency and effectiveness of federal programs and operations by establishing,assessing,correcting,andreportingonmanagementcontrols. circulara1238 provides that: instead of',
36386:'considering internal control as an isolated management tool, agencies should integrate their effortstomeet therequirementsofthefmfiawithothereffortsto improve effectiveness and accountability. thus, internal',
36387:'control should be an integral part of the entire cycle of planning, budgeting, management, accounting, and auditing. it should support',
36388:'the effectiveness and the integrity of every step of the process and provide continual feedback to management. federal managers must',
36389:'carefully consider the appropriate balance between controls and risk in their programs and operations. too many controls can result in',
36390:'inefficient and ineffective government; agency managers must ensure an appropriate balance between the strength of controls and the relative risk',
36391:'associated with particular programs and operations. the benefits of controls should outweigh the cost. agencies should consider both qualitative and',
36392:'quantitative factors when analyzing costs against benefits.9 7see requirements in sffas 39, subsequent events: codification of accounting and financial reporting',
36393:'standards contained in the aicpa statements on auditing standards,august 4, 2010. 8 omb circulars are not applicable to legislative and',
36394:'judicial branch entities. however, the general principles are appropriate for federal reporting entities in the legislative and judicial branches. 9',
36395:'omb circulara123, december 21, 2004, section i, page 5. page 11 technical release 12 fasab handbook, version 20 06/21 technical',
36396:'release 12 validation of grantaccrual estimates 26. as part ofagencies’ internal controlprocedurestoensurethatgrantaccrualestimates for the basic financial statements were reasonable, agencies',
36397:'should validate grant accrual estimates by comparing the estimates with subsequent grantee reporting. 27. when subsequently validating the reasonableness of',
36398:'accrual estimates, an agency does not need to obtain data10 from 100% of grantees in order to validate the reasonableness',
36399:'of grant accrual estimates. for example, agencies may validate estimates based upon: a. grantee data that represents a majority of',
36400:'the total grant portfolio, or b. data from a statistically valid sampling of the total grantee portfolio. 28. when developing',
36401:'grant accrual estimates, agencies only have access to data that is available at the time. the nature and reliability of',
36402:'available grant data varies widely and, because of the relationship between the grantor and the grantee, is often only indirectly',
36403:'influenced by management. the validation process includes an understanding that estimates are inherently uncertain, and that management must use judgment',
36404:'in determining: a. whether differences between estimated and actual expenses are reasonable b. if different estimation methodscould result in more',
36405:'accurate estimatesof net cost in the future 29. adifferencebetweenanaccountingestimate andactual resultdoesnot necessarily represent a misstatement of the financial statements. rather,',
36406:'differences could be an outcome of inherent estimation uncertainty. however, it could result in a misstatement if, as described in',
36407:'sffas 21, reporting corrections of errors and changes inaccounting principles, the difference arises from mathematical mistakes, mistakes in the application',
36408:'of accounting principles, or oversight or misuse of facts that existed at the time the financial statements were prepared. differences',
36409:'between estimates and actual should be taken into consideration in developing the subsequent period’s estimate.11 10 data refers to information',
36410:'provided by grantees regarding their actual expenses or expenditures. sources of data may include, but are not limited to, grantee',
36411:'reports to agencies and audited amounts from single auditact audits. 11 see sffas 21, paragraph 10. page 12 technical release',
36412:'12 fasab handbook, version 20 06/21 technical release 12 30. an illustrative decision tree diagram of the validation process is',
36413:'displayed in figure 2 of appendix b: illustrative decision tree diagrams for developing and validating grant accruals. training and monitoring',
36414:'of grantees 31. since preparation of accrual estimates is dependent upon relevant and reliable data, accurate and timely reporting bygrant',
36415:'recipientsserves as the basisfor historicaldata used in preparing future estimates and provides reliable actual data to which accrual estimates can',
36416:'be compared. agencies should consider whether grant recipients need training on completing required financial reports. if needed, training may be',
36417:'delivered via agency sponsored conferences, workshops and/or seminars, customer service centers and help desks, or computer based sources such as',
36418:'webcasts or other training options available through the agency’s website. 32. reports submitted by grantees should be reviewed to ensure',
36419:'their reasonableness. agencies should have policies and procedures in place to review and verify the grantee expenditures or expenses reported.12',
36420:'33. when agencies engage in onsite financial monitoring of grantees, protocols should include comparing grant expenses or expenditures reported with',
36421:'actual expenses or expenditures and to supporting documentation. techniques for monitoring of grantee reporting of expenditures may also include stratified',
36422:'sampling. 34. timely follow up of incorrect reporting should be performed to ensure a higher degree of compliance with reporting',
36423:'requirements. for example, inaccurate grant expenditures or expenses reported could be conveyed to grantees by an official letter requesting a',
36424:'corrective action plan. during onsite financial reviews, technical assistance could be provided when grant expenditures reported are inaccurate. the provisions',
36425:'of thistechnical release need not be applied to immaterial items. 12 at the time of this writing, grant recipients predominantly',
36426:'report expenditures. however, expenses may be reported in some cases and in the future. page 13 technical release 12 fasab',
36427:'handbook, version 20 06/21 technical release 12 appendixa: basis for conclusions thisappendixdiscussessomefactorsconsideredsignificant bycommitteemembersin reaching the conclusions in thistechnical release. it',
36428:'includes the reasons for accepting certain approaches and rejecting others. individual members gave greater weight to some factors than to',
36429:'others. project history a1. aseriesofroundtablesinapril2009indicatedthatguidancefor determiningwhether estimatesof advances andpayablesforgrant programsare reasonable would be helpfulfor agencies. specifically, agencies indicated a need',
36430:'for guidance supporting costeffective development of reasonable estimates. a2. ataskforceconsisting ofrepresentatives fromfederal agencies andindependent accounting and consulting firms assisted fasab',
36431:'staff in identifying areas where guidance would be helpful. specifically, members indicated a need for guidance regarding: a. appropriate reliance',
36432:'on the best available data in light of the often limited access grantee data b. situations where no historical data',
36433:'is available such as new or modified grant programs c. assessment about materiality and whether it is appropriate to focus',
36434:'on the statement of net cost when making such assessments d. costeffective means of validating previous estimates a3. proposeddraftguidancewassubmittedtothefasab’saccountingandauditingpolicy committeeaapcfor',
36435:'considerationatthejanuary2010aapcmeeting. theaapc agreed to accept the project. summary of outreach efforts a4. the exposure draft ed, accrual estimates for grants,',
36436:'was issued march 22, 2010, with comments requestedbyapril22,2010. uponreleaseoftheexposuredraft,noticesand press releases were provided to: page 14 technical release 12 fasab',
36437:'handbook, version 20 06/21 technical release 12 a. the federal register b. fasab news c. the journal of accountancy, agatoday,',
36438:'the cpa journal, government executive, the cpa letter, and government accounting and auditing update d. the cfo council, the presidents',
36439:'council on integrity and efficiency, and the financial statement audit network e. committees of professional associations generally commenting on exposure',
36440:'drafts in the past f. members of the grantsaccounting task force that helped develop the ed a5. toencourageresponses,a reminder noticewas',
36441:'providedonapril22,2010tothefasab listserv. comments received a6. we received 24 responses from the following sources: federal internal nonfederal external users, academics, others',
36442:'0 3 auditors 4 2 preparers and financial managers 15 0 total 19 5 a7. the majority of responses concurred',
36443:'with all aspects of the proposed guidance. revisions were made for the following reasons: a. corrections such as removing references',
36444:'to yearend, since the guidance can be applied to any reporting period b. revisions to language that was more prescriptive',
36445:'than the aapc intended by adding phrases such as “typical support may include” rather than a list that might be',
36446:'interpreted as being a required checklist page 15 technical release 12 fasab handbook, version 20 06/21 technical release 12 c.',
36447:'improvements for clarity and to improve the logical flow of the guidance netting of grantrelatedadvances andaccounts payable a8. the ed',
36448:'included the following proposed guidance on netting grantrelated advances and accountspayableon theface of thebalancesheetwith arequirement toreportgrantrelated advances and accounts payable',
36449:'in a note to the financial statements: display [26] when grant accrual estimates are prepared on an aggregate level, agencies',
36450:'may display a net amount on the balance sheet and report estimated disaggregated advances and liabilities in a note. an',
36451:'illustrative example is displayed inappendix c, illustrative example of note on netting grant advances and accrued liabilities. a9. although a',
36452:'majority of respondents concurred with the proposed guidance, a significant minority found the language confusing. in addition, the language appeared',
36453:'to allow netting incertain circumstancesand to prohibit it inothercircumstances, whichwasnot the intent of theproposedtr. theaapcbelievesthatsignificant revisions totheguidancewouldbe needed to clarify',
36454:'it. generally, significant revisions are adopted only after providing an opportunity for public comment. given the time involved in issuing',
36455:'a revised ed for comment,theaapcdecidedtodeletetheproposedguidanceonnettingfromthistr. the aapc expressed willingness to address the issue of netting in the future if needed.',
36456:'effective date a10.theedincludedaprovisionthattheguidancewaseffectiveimmediately. tworespondents indicated that the effective date should be postponed to a future fiscal year, with earlier implementation',
36457:'encouraged. although trs do not establish new reporting requirements, theaapc has no objection to postponing the effective date to fy',
36458:'2011 with earlier implementation encouraged. page 16 technical release 12 fasab handbook, version 20 06/21 technical release 12 appendix b:',
36459:'illustrative decision tree diagrams for developing and validating grantaccruals the example decision tree diagram in figure 1 below illustrates processes',
36460:'that agencies might useinthegrantaccrualprocessdescribedinparagraphs11– 19. thisexampleisillustrativeonly and is not authoritative guidance. page 17 technical release 12 fasab handbook, version 20',
36461:'06/21 technical release 12 figure 1: illustrative example of grant accrual process obtain most recent reports from grantees. yes search',
36462:'database for historical trends. apply historical trend data to most recent data. post accrual estimate. does relevant and reliable historical',
36463:'data exist? yes no does similar historical data exist? no determine a reasonable basis for initial estimate e.g., straightline projection.',
36464:'post accrual estimate. analyze similarities and differences. apply to most recent data. post accrual estimate. proceed to validation/verification when grantee',
36465:'reports are received. page 18 technical release 12 fasab handbook, version 20 06/21 technical release 12 this example decision tree',
36466:'diagram in figure 2 below illustrates processes that agencies might use in validating grant accrual estimates in paragraphs 26 29.',
36467:'this example is illustrative only and is not authoritative guidance. figure 2: illustrative example of validation/verification process obtain subsequent reports',
36468:'from a sufficient proportion of grantees that correlate to the reporting period that was estimated. see paragraph 27 of this',
36469:'tr. if reports represent less than 100% of grantees, perform an analysis and project available actual data to the estimate.',
36470:'does difference cause any statements presented to be materially misstated?1 approve estimate and document verification. yes no 􀂃restate prior period',
36471:'financial statements. 􀂃update data used to calculate accrual estimate for future periods. 􀂃 consider updating process for estimating accruals. was',
36472:'difference caused by misuse of information available at the time? 2 yes no incorporate adjustment into current period estimate update',
36473:'data used to calculate accrual estimate for future periods. 􀂃 consider updating process for estimating accrual. 1. see sffas 21,',
36474:'reporting corrections of errors and changes in accounting principles, amendment of sffas 7, accounting for revenue and other financing sources,',
36475:'paragraph 11. 2. see sffas 21, paragraph 10. page 19 technical release 12 fasab handbook, version 20 06/21 technical release',
36476:'12 appendix c: relevant citations of existing guidance five elements of accrualbased federal financial statements – assets, liabilities, net position,',
36477:'revenues and expenses are defined in statement of federal financialaccounting concepts 5, definitions of elements and basic recognition criteria for',
36478:'accrualbasis financial statements. an asset is a resource that embodies economic benefits or services that the federal government controls.13 aliability',
36479:'is a present obligation of the federal government to provide assets or services to another entity at a determinable date,',
36480:'when a specified event occurs, or on demand.14 statementoffederalfinancialaccountingstandardssffas1, accounting for selected assets and liabilities, defines advances as cash outlays',
36481:'made by a federal entity to its employees, contractors, grantees, or other to cover a part or all of the',
36482:'recipients’ anticipated expenses or as advance payments for the cost of goods and services the entity acquires. examples include travel',
36483:'advances disbursed to employees prior to business trips, and cash or other assets disbursed under a contract, grant, or cooperative',
36484:'agreement before services or goods are provided by the contractor or grantee.15 sffas 5, accounting for liabilities of the federal',
36485:'government, states that: [24.] anonexchange transaction arises when one party to a transaction receives value without directly giving or promising',
36486:'value in return. there is a oneway flow of resources or promises. for federal nonexchange transactions, a liability should be',
36487:'recognized for any unpaid amounts due as of the reporting date. this includes amounts due from the federal entitytopayforbenefits, goods,',
36488:'orservices16 providedunderthetermsoftheprogram, as of the federal entity’s reporting date, whether or not such amounts have been reported to the federalentityforexample,',
36489:'estimatedmedicaidpaymentsduetohealthprovidersforservice that has been rendered and that will be financed by the federal entity but have not yet been reported',
36490:'to the federal entity. 13 sffac 5, par. 18. 14 sffac 5, par. 39. 15 sffas 1, par. 57. 16',
36491:'sffas 5, footnote [12] goods or services may be provided under the terms of the program in the form of,',
36492:'for example, contractors providing a service for the government on the behalf of the disaster relief beneficiaries. page 20 technical',
36493:'release 12 fasab handbook, version 20 06/21 technical release 12 [25] many grant and certain entitlementprograms are nonexchange transactions. when',
36494:'the federal government creates an entitlement program or gives a grant to state or local governments, the provision of the',
36495:'payments is determined by federal law rather than through an exchange transaction. sffas 5 requires that for grant programs, the',
36496:'liability that should be reported includes the amount of allowable expense that the grantees have incurred as of the end',
36497:'of the period, but have not collected from the agency. complying with sffas 5 requires that the agency estimate the',
36498:'amounts not reported by the grantee but due to the grantee as of the reporting date. when the grantee has',
36499:'submitted subsequent reports providing the grantee’s actual costs, the federal agency will be able to assess the grantee reports for',
36500:'accuracy and/or analyze the agency’s previous estimate for accuracy. sffas 3, accounting for inventory and related property, “materiality” section, states',
36501:'that: [7.] the board intends that the standards application be limited to items that are material. materiality has not been',
36502:'strictly defined in the accounting community; rather, it has been a matter of judgment on the part of preparers of',
36503:'financial statements and the auditors who attest to them. the board proposes relying on the financialaccounting standards boards fasb concept',
36504:'as modified by certain concepts expressed in governmental auditing standards. presented below is the boards position on the issue of',
36505:'materiality at this time. [8.] the accounting and reporting provisions of the boards accounting standards need not be applied to',
36506:'immaterial items. the determination of whether an item is immaterial requires the exercise of considerable judgment, based on consideration of',
36507:'specific facts and circumstances. [9.] fasbs statement ofaccounting concepts no. 2, qualitative characteristics of accounting information, discusses the concept of',
36508:'materiality. according to this statement, the determination of whether an item is material dependson the degree to which omitting or',
36509:'misstating information about this item makes it probable that the judgment of a reasonable person relying on the information would',
36510:'have been changed or influenced by the omission or the misstatement. this concept includes both qualitative and quantitative considerations. an',
36511:'item that is not considered material from a quantitative standpoint may be considered qualitatively material if it would influence or',
36512:'change the judgment of the financial statement user. [10.] the boardbelieves that fasbs definitionof materialityis generally appropriate for use in',
36513:'applying the accounting and reporting provisions of the boards accounting standards. in the federal government environment, however, the definition is',
36514:'extended to apply to all financial information included in the annual financial report and, therefore, is not limited to the',
36515:'principal schedules and related notes. page 21 technical release 12 fasab handbook, version 20 06/21 technical release 12 [11.] in',
36516:'applying the concept of materiality, the needs of the users of the annual financial report should also be considered. in',
36517:'the federal government environment, such needs generally differ from those of users of commercial entity financial statements. for example, federalgovernment',
36518:'financialstatementuserneedsextendto havingthe abilitytoassessthe efficiency and the effectiveness of the entitys programs. further, compliance with budget and other financerelated laws, rules,',
36519:'and regulations is also a significant consideration of such users. [12.] this is expressed well in the governmentauditing standards the',
36520:'yellow book: in government audits the materiality level and/or threshold of acceptable risk may be lower than in similartype audits',
36521:'in the privatesector because of the public accountability of the entity, the various legal and regulatory requirements, and the visibility',
36522:'and sensitivity of government programs, activities, and functions. ch. 3, par. 33. [13.] while this standard applies to an auditors',
36523:'evaluation of materiality rather than a preparers, it does provide insight into the factors affecting materiality in the federal government.',
36524:'[14.] therefore, the accounting and reporting provisions of the boards recommended standards should be applied to all items that would',
36525:'influence or change the users judgments of the entitys efficiency and the effectiveness and its compliance with laws and regulations',
36526:'in a material manner. [15.] in order to emphasize that materiality should be considered in applying all accounting standards, the',
36527:'board has decided to place a notice at the end of each recommended accounting standard. the notice will read as',
36528:'follows: page 22 technical release 12 fasab handbook, version 20 06/21 technical release 12 appendix d:aapc grantsaccounting task force wendy',
36529:'m. payne, task force chair aapc chair task force working group: department of health and human services patricia irving dj',
36530:'business solutions denise joseph departmentoftransportation katherinelambert grant thornton llp shal malhotra kforce government solutions jim mckay department. of justice marcia',
36531:'paull department of justice frank ramos kpmg llp catherine supernaw kpmg llp derek thomas clifton gunderson llp denise wu task',
36532:'force memberagencies department ofagriculture u.s.agency for international development department of commerce corporation for national and community service corporation for national',
36533:'and community service oig defense finance andaccounting service department of education environmental protectionagency executive office of the president, office ofadministration',
36534:'general servicesadministration governmentaccountability office department of health and human services department of health and human services oig department of housing',
36535:'and urban development oig department of justice department of justice oig department of labor oig nationalaeronautics and spaceadministration national science',
36536:'foundation office of management and budget small businessadministration page 23 technical release 12 fasab handbook, version 20 06/21 technical release',
36537:'12 department oftransportation department oftransportation oig department of the treasury task force member firms clifton gunderson llp deloitte & touche',
36538:'llp dj business solutions grant thornton llp kearney & company kforce government solutions kpmg llp pricewaterhousecoopers page 24 technical release',
36539:'12 fasab handbook, version 20 06/21 technical release 13: implementation guide forestimating the historical cost of general property, plant, and',
36540:'equipment status issued effective date affects affected by june 1, 2011 upon issuance none. technical release 17. summary this technical',
36541:'release addresses the historical cost estimating of gpp&e. the guide provides direction on types of estimating methodologies and the documentation',
36542:'to support the valuation estimatesofgpp&e. thisguidanceprovidesafoundationforpreparerstoexercisejudgmentin formulating those estimates. the examples outlined illustrate the use of various estimating methodologies to',
36543:'derive the historical cost of gpp&e in accordance with existing guidance permitting use of estimates. page 1 technical release 13',
36544:'fasab handbook, version 20 06/21 technical release 13 table of contents page summary 1 technical guidance 3 appendixa:basis for conclusions',
36545:'16 appendix b:abbreviations 18 page 2 technical release 13 fasab handbook, version 20 06/21 technical release 13 technical guidance paragraphs',
36546:'1 through 10 were rescinded by technical release 17.1 scope 10a. readers of this technical release tr should first refer',
36547:'to the hierarchy of accounting standards in statement of federal financialaccounting standards sffas 34, the hierarchy of generally accepted accounting',
36548:'principles, including the application of standards issued by the financial accounting standards board. this tr supplements the relevant accounting standards',
36549:'but is not a substitute for and does not take precedence over the standards. 10b. sffas 6, accounting for property,',
36550:'plant, and equipment, as amended provides that reasonable estimates may be used to establish historical cost of general property, plant,',
36551:'and equipment pp&e in accordance with the asset recognition and measurement provisions within sffas 6. this is also applicable to',
36552:'internal use software when the softwaremeetsthecriteriaforgeneralpp&einaccordancewithsffas10, accounting for internal use software. 10c. sffas 50, establishing opening balances for general property,',
36553:'plant, and equipment: amending statement of federal financial accounting standards sffas 6, sffas 10, sffas 23, and rescinding sffas 35,',
36554:'amended sffas 6 to allow a reporting entity, under specific conditions, to apply alternative valuation methods in establishing opening balances',
36555:'for general pp&e. effective date 10d. this tr is effective upon issuance. examples of practice 11. the examples outlined in',
36556:'this guide illustrate the use of various estimating methodologies to derive the historical cost of general pp&e in accordance with',
36557:'sffas 6, as amended. 1 footnote 1 was rescinded by technical release 17. page 3 technical release 13 fasab handbook,',
36558:'version 20 06/21 technical release 13 although the measurement basis for valuing general pp&e remains historical cost, reasonable estimates may',
36559:'be used to establish the historical cost of general pp&e in accordance with the asset recognition and measurement provisions of',
36560:'sffas 6, as amended.1a 12. reasonable estimates may be based on a. cost of similar assets at the time of',
36561:'acquisition; b. current cost of similar assets discounted for inflation since the time of acquisition that is, deflating current costs',
36562:'to costs at the time of acquisition by general price index; or c. other reasonable methods, including latest acquisition cost',
36563:'and estimation methods based on information such as, but not limited to, budget, appropriations, engineering documents,contracts,orotherreportsreflectingamountstobeexpended.2,3,4 12a. in some cases,',
36564:'the inservice date must be estimated. in estimating the year that the base unit wasplaced in service, if onlya range',
36565:'of yearscan be identified, then the midpoint of the range is an acceptable estimate of the inservice date. 13. agency',
36566:'management is responsible for establishing accounting policies, including the methodologiesandbasesforestimatinghistoricalcost. managementisalsoresponsiblefor maintaining adequate documentation of the sources of data and',
36567:'the application of methodologiesusedwhenestimatinghistoricalcost. managementshouldexpecttosupport estimates with verifiable documented information. adequate documentation of the source of the data and the',
36568:'application of the methodology used will help support management’s assertion that the results are in compliance with accounting standards in',
36569:'all material respects. 14. the specific examples in this guidance are how agencies derived estimated historical costs using the following',
36570:'methods: a. deflation of current replacement costs, 1a sffas 50, establishing opening balances for general property, plant, and equipment: amending',
36571:'statement of federal financial accounting standards sffas 6, sffas 10, sffas 23, and rescinding sffas 35, provides for deemed cost',
36572:'to be used for opening balances in some cases. estimating historical cost is one of several deemed cost valuationmethods. thistraddresses',
36573:'theestimationof historical costand does not address otheracceptable deemed cost methods. 2 footnote 2 was rescinded by technical release 17. 3',
36574:'footnote 3 was rescinded by technical release 17. 4 footnote 4 was rescinded by technical release 17. page 4 technical',
36575:'release 13 fasab handbook, version 20 06/21 technical release 13 b. appraisals with deflation to the year of purchase, c.',
36576:'expenditures, d. budgets and appropriations, and e. gpp&e in possession of contractors. estimates may be based on information such as,',
36577:'but not limited to, budget, appropriations, engineering documents, contracts, or other reports reflecting amounts to be expended. 15. the following',
36578:'examples provide methods used to estimate gpp&e historical costs. however, the examples are for illustrative purposes only. the examples are',
36579:'not all encompassing and agencies may identify other more useful and relevant estimating methodologies. the examples are not meant to',
36580:'be stepbystep instructions on how to develop estimating methodologies. users of this guidance should use the information provided in these',
36581:'examples to develop their own reasonable estimating methodologies. federal entities implementing this guidance are also encouraged to discuss any new',
36582:'estimation methodologies with their auditors prior to implementation. example 1 – deflation of current replacement5 16. thefollowingexampledescribesanestimationmethodologyusedbyagencyatoestablish an estimate of',
36583:'the original cost of a building constructed in 1984. agencyauses the estimated construction cost of the building in present day',
36584:'dollars and then discounts that value back to the year in which the asset was constructed. agencyatakes the current replacement',
36585:'costs of similar items and deflates those costs, through the consumer price index cpi. note that other indices from the',
36586:'department of labor’s bureau of labor statistics also may be appropriate but were not selected for use in this example.',
36587:'population of data 17. the agency determined the cost of replacing the building in its same physical form with substantially',
36588:'the same materials and design; then the agency used a pricing index to discount the current asset cost to its',
36589:'estimated cost at the time of acquisition or construction. 5 some of the information used in this example was obtained',
36590:'from the public sectoraccounting standards board psab of the canadian institute of charteredaccountants /asset management newsletter no. 16 prepared by',
36591:'kpmg. page 5 technical release 13 fasab handbook, version 20 06/21 technical release 13 assumptions used 18. the following assumptions',
36592:'were used to estimate the cost of the building and land. a. land was purchased in 1983 and is appraised',
36593:'at $1.5 million in 2008. b. a50,000 square feet building was constructed in 1984, is well maintained and has not',
36594:'received any major betterments except for a 5,000 square foot addition in june 1999. c. 2008 replacement cost of the',
36595:'building was estimated at $8.5 million including $500,000 replacement cost for the addition. d. expected useful life of the building',
36596:'is 40 years and depreciation would be calculated at year 24 of a 40 year asset. e. cpi is used',
36597:'for deflating cost.6 calculation of estimate 19. toestimate theoriginal cost ofthebuildingin1984,agencyamultipliedthecurrent replacement costofthebuilding $8.0 million excluding anaddition constructedin 1999 by',
36598:'the cpi 0.4505. based on this calculation, the deflated cost of the building was approximately $3.604 million in 1984 dollars.',
36599:'similar calculations using cpi for the addition and land yielded the estimated historical cost of these components of the property.',
36600:'the calculations are presented below. table 1: 2008 reproduction cost cost index 19xx/2008 estimate of original cost building $8,000,000 .4505',
36601:'$3,604,000 addition $500,000 .6960 $348,000 total building $8,500,000 $3,952,000 land $1,500,000 .4100 $615,000 total $10,000,000 $4,567,000 6 for simplicity the',
36602:'example uses the consumer price index to discount current replacement costs to the year of original purchase or construction. in',
36603:'some cases, the consumer price index may be the only option. however, for some assets a more precise pricing index',
36604:'might be available. for example, the department of labors bureau of labor statistics has an extensive table of indices. page',
36605:'6 technical release 13 fasab handbook, version 20 06/21 technical release 13 analysis of data 20. oncetheestimatedhistoricalcostofthebuildingwasestablished,thecostwasamortizedto the 2008 opening',
36606:'balance sheet date using appropriate depreciation rates in order to establish the opening net book value. table 2: at october',
36607:'1, 2008 age/useful life years estimated historical cost accumulated depreciation net book value building 24/40 $3,604,000 $2,162,400 $1,441,60 0 addition',
36608:'9/15 348,000 208,800 139,200 total building 3,952,000 2,371,200 1,580,800 land 615,000 0 615,000 total $4,567,000 $2,371,200 $2,195,80 0 example 2',
36609:'– use ofappraisal information 21. the followingexampledescribes anestimationmethodology usedbyagencybto establish theestimated costoftwovesselclassesbytheuse of thirdpartyappraisalstosupport asset record adjustments. the example uses',
36610:'estimates obtained from appraisals to validate the valueof thevesselsand todeterminenecessaryadjustmentstoagencyb’scoreaccounting system. population of data 22. inordertopopulatethedataforestimation,agencybperformed severalofthefollowing procedures. a. agency',
36611:'b conducted a physical inventory to ensure that assets identified for appraisal could still be physically located and were still',
36612:'in service. physical inventories were conducted using: i. onsite vouching, ii. digital photos with newspaper showing the date and location,',
36613:'or page 7 technical release 13 fasab handbook, version 20 06/21 technical release 13 iii. authorized maintenance or operations applications',
36614:'to confirm existence. b. agency b reviewed and, if needed, updated dateinservice dis from historical information. c. agency b determined',
36615:'that records in the accounting system were consistent with the inventory and dis. d. agency b ensured that assets within',
36616:'a class were similar in configuration. e. theagency b program offices were used to gather “technical engineering” information e.g. type',
36617:'of engines, technical updates. assumptions used 23. the following assumptions were used to estimate the cost of the sea vessels.',
36618:'a. agency b did not provide cost, accumulated depreciation and net book value to appraisers to avoid the possibility that',
36619:'these values might influence the thirdparty appraisers output. values are appraised using a deflation factor to year of purchase. b.',
36620:'iftherewasnodisforavessel,anaveragediswasdeterminedbyusingthedisfrom the first and last vessels placed in service. the asset’s acquisition cost was then “indexed” by using an appropriate',
36621:'bureau of labor statistics pricing index. c. appraisal specialist determined appraisal value using a desktop appraisal approach.7 analysis of data',
36622:'24. an appraisal report containing an individual valuation estimated acquisition cost for each asset as of the identified date of',
36623:'the report or appraised value as of original date in service contract specific was provided toagency b. the agency performed',
36624:'many of the following analytical processes. a. anagencyb subjectmatter expert reviewed andapprovedappraisal report. 7a“desktop” appraisal is when an appraiser estimates',
36625:'the value of a property without a physical inspection, but uses property records. the desktop approach was used byagency b',
36626:'for appraisals and cost estimates due to the cost benefits; it is less costly to an agency than a physical',
36627:'inspection appraisal. page 8 technical release 13 fasab handbook, version 20 06/21 technical release 13 b. if there was no',
36628:'dis for a vessel, an average dis was determined by using the dis from the first and last vessels placed',
36629:'in service. the asset’s acquisition cost was then “indexed” by using an appropriate bureau of labor statistics pricing index. c.',
36630:'the appraisal/calculated cost was compared to official fixed assets record cost to determine asset cost difference. d. agency b prepared',
36631:'a detailed summary of differences by asset and class to compare cost and accumulated depreciation. e. the data was reviewed',
36632:'and approved by appropriate agency b personnel. f. documentation was prepared containing support of the fixed asset adjustments needed. calculation',
36633:'of estimate 25. agency b then analyzed the financial statement impact of the appraisal process to determine needed adjustments. table',
36634:'3: asset class delivery startdelivery end systemacquisitioncost per fixedasset records appraisalvalue less fixed asset records acquisitioncost appraisal valueless fixed asset',
36635:'records depreciationexpense net change vessel class i 16 vsls fy96 fy04 $607.9m $60.1m $3.0m $57.1m vessel class ii 65 vsls',
36636:'fy 98 fy06 287.4m 7.6m 5.7m 1.9m totals $895.3m $52.5m $2.7m $55.2m once the appraised values were accepted, necessary adjustments',
36637:'were made to the system asset by asset/lump sum to determine the estimated historical cost of the vessel classes. example',
36638:'3 – use of expenditure information 26. agency c used the following procedures to estimate its real property values by',
36639:'the use of expenditures. expenditures were available on a project basis but each project produced multiple assets. the objective was',
36640:'to assign reliable project cost to individual assets based on estimates. page 9 technical release 13 fasab handbook, version 20',
36641:'06/21 technical release 13 population of data 27. agency c real property personnel first examined their records to determine whether',
36642:'a complete and current inventory of real property by individual project was available. if the specific inventory of a complete',
36643:'project did not exist an inventory would be obtained from project personnel onsite. 28. anagencycrealpropertyworkgroupthenobtainedasummaryofactualcapitalizedproject costs by real property class',
36644:'i.e., land, dams, levees, buildings, grounds, etc.. analysis of data & calculation of estimate 29. once the work group had',
36645:'both a project specific inventory of all real property assets and a breakout of the actual capitalized costs by project',
36646:'and class, they began the process of assigningavaluetoeachassetwithinaprojectnottoexceedthetotalprojectcost. utilizing all available real estate records, project records, assistance fromcost estimating personnel,',
36647:'comparative data at other projects, real estate financial information, operations data, engineer estimates, plus video tapes, photographs, narrative descriptions of',
36648:'the structure and professional judgment the work group either used actual cost or estimated the cost of each asset ensuring',
36649:'the total dollars assigned agreed with the total cost for each project as recorded inagency c’s financial subsystem. example 4',
36650:'– use of budget and appropriation information 30. the following example outlines steps for estimating the historical cost of existing',
36651:'assets using budget and appropriation information. assumptions used a. congressappropriatedfunds toagencydinfy2007to acquire9 aircraft. b. as of the estimation date, 7',
36652:'of the 9 aircraft have been delivered. analysis of data & calculation of estimate 31. the steps of this process',
36653:'include: a. verification of existence of the asset acquired. b. estimation of total historical cost for the asset group page',
36654:'10 technical release 13 fasab handbook, version 20 06/21 technical release 13 c. documentation 32. verification of existence a. prior',
36655:'to delivery, all costs associated with the items were reported in an appropriate asset account. when the asset was delivered',
36656:'it was recorded in an accountability system of record asr and the completed asset was subject to inventory/existence verification. b.',
36657:'the asset management system was updated when data on the receipt of the aircraft was sent from the reporting entity’s',
36658:'property accountability system of record. the acknowledgment of delivery serves as proof that the aircraft assets were received. continued existence',
36659:'of the asset was verified through periodic inventories. 33. estimation of total historical cost for the asset group a. the',
36660:'recorded cost of the assets should represent the “historical cost”, including costs associated with getting the asset to a form',
36661:'and location suitable for its intended use. b. the asset valuation is based on the budget of the u.s. government',
36662:'commonly referred to as the president’s budget request. the budget and related budget justification materials provided detailed supporting information that',
36663:'facilitated congressional review of budget requests. as the entity is reviewing the budget information for inclusion in the estimate, the',
36664:'entity should also review related information, such as planning documents, to identify other material costs associated with getting the asset',
36665:'to a form and location suitable for its intended use. if material, suchcostsshouldbeestimated. forsimplificationofthisexample,theotherassociated costs are not shown in the',
36666:'below example. page 11 technical release 13 fasab handbook, version 20 06/21 technical release 13 table 4 below shows the',
36667:'fy 2007funded aircraft cost based on amounts included in the budget. table 4 calculations to determine the cost of fy',
36668:'2007fundedaircraft $ in millions procurement cost for 9 aircraft based on budget estimates $722.6 less support equipment 81.1 total cost',
36669:'for the 9 aircraft $641.5 average cost $641.5m ÷ 9 $ 71.38 the supporting equipment is subtracted from the aircraft',
36670:'procurement cost in order to capitalize this equipment separate from the cost of the aircraft. c. theagencydappropriationact and/or theconference report',
36671:'accompanyingitis used to identify the amount of program funding provided by congress to address requirementsidentified in the budget.amounts appropriated may',
36672:'frequentlydiffer from amountsrequestedinthebudget. therelatedcongressionalcommitteeorconference report on the appropriation may explain the rationale for the change from the amount requested in',
36673:'the budget. table 5 belowshows the amount of the congressional appropriation forthe aircraft lessthe value of excluded amounts. excluded amounts',
36674:'were based on detail included in the budget. table 5 appropriation amount less excluded items foraircraft $ in millions provided',
36675:'in fy 2007 appropriations act $725.0 less support equipment based on budget detail 81.1 adjusted appropriated amount for the 9',
36676:'aircraft $643.9 average cost $643.9m ÷ 9 $ 71.5 the funding for support equipment was not separately identified in the',
36677:'appropriation. for cost purposes, the amount included in the budget estimate $81.1m was used. d. adjustments to funds available to',
36678:'a program may frequently occur over the life of the appropriation. these adjustments, which can increase or decrease available funds,',
36679:'8valuations based on budget information may need to be revised to address material revisions that occur subsequent to budget submission',
36680:'during the appropriation and funds allocation processes. page 12 technical release 13 fasab handbook, version 20 06/21 technical release 13',
36681:'result from actions including congressional rescissions and departmental reprogrammings. table 6 below shows the aircraft cost as adjusted to account',
36682:'for a subsequent year congressional rescission. table 6 appropriation amount less excluded items foraircraft $ in millions adjusted appropriated amount',
36683:'for the 9 aircraft $643.9 less congressional rescission for the aircraft 9.9 total appropriated amount for the 9 aircraft $634.0',
36684:'average cost $634.0m ÷ 9 $ 70.4 the capitalized cost may not exceed the appropriated amount as adjusted by departmental',
36685:'reprogramming and congressional rescissions, i.e., the amount shown in table 6. 34. documentation a. agency d maintains sufficient and appropriate',
36686:'documentation relating to: 1 existence; 2 cost analysis techniques; 3 data source; and 4 reasonableness of the estimation methodology. example',
36687:'5 – gpp&e in the possession of contractors 35. thefollowingexamplesummarizestheproceduresusedatagencyeforestimatingthecost of gpp&e in the possession of its contractors. this estimate',
36688:'may be used when the agency lacks internal documentation and/or when the cost of reconstructing records using internal documentation is',
36689:'cost prohibitive. 36. contractors generally follow a process similar to the one described below, when estimating the value of gpp&e',
36690:'manufactured or acquired for federal agencies, referred to in this example as contractorheld gpp&e. these acquisitions may be held for',
36691:'use by the contractor, held for use by other contractors, or transferred to a federal entity for its direct use.',
36692:'the values are typically estimated by the contractor first obtaining a bill of material bom for every part required to',
36693:'complete the gpp&e asset being constructed. the bom canhavecost,quantity,partdescription,rawmaterialsused,etc. also,contractorstypically add estimated labor cost. this labor value is then added',
36694:'to the bom cost to derive a total estimated direct cost for the gpp&e asset. further, contractors apply overhead and,',
36695:'when applicable, other indirect markups. the sum total for the asset is the basis used to support gpp&e recorded byagency',
36696:'e. page 13 technical release 13 fasab handbook, version 20 06/21 technical release 13 37. agency e has procedures in',
36697:'place to provide reasonable assurance that the contractor provided estimates of the value of manufactured items are reasonable. the processes',
36698:'described below are intended to provideagency e with relevant, sufficient and reliable information on which to base its estimate of',
36699:'contractorheld gpp&e. population of data 38. agency e contractors are required to report information related to acquisitions, fabrications and/or disposals',
36700:'ofindividualgpp&eitems toagencyeonaregular basis. tofacilitate reporting,agency e utilizes an automated reporting tool, when appropriate, to receive this information from its contractors',
36701:'and maintains control over this information prior to it being entered into the property accounting system. analysis of data 39.',
36702:'agency e employs a series of controls over the preparation of contractor accounting estimates and supporting data, including assessments and',
36703:'validation procedures that are applied through independent external parties and/or internal agency resources. external third party procedures 40. whenpractical andcosteffective,agencyeleveragestothe',
36704:'extentpossibleindependent assessments performed by external parties. the objective of these assessments is to provideagency e with reasonable assurance that contractor',
36705:'property, logistics and cost accounting systems comply with federal requirements designed to provide a reasonable estimate of the gpp&e data.',
36706:'41. anagreeduponproceduresaupreviewofagencye’smajor contracts isoneexampleof anindependentassessment. thecontracts subjecttotheaupreviews areselectedusing ariskbasedapproach. theaups include areview ofthecontractor’spolicies,procedures and internal controls relevant to the contractors',
36707:'cost accounting, logistics and production systems. the intention of the assessments is to validate the accuracy, reliability, existence, and completeness',
36708:'of contractor reported gpp&e data through an analysis of transaction samples. internal third party procedures 42. agency es procurement, logistics,',
36709:'project management, and finance personnel also performed oversight and validation activities over contractor estimate submissions on an ongoing basis. page',
36710:'14 technical release 13 fasab handbook, version 20 06/21 technical release 13 43. agencyeprocurementpersonnel,forexample,overseetheexecutionofcontractorworkas required by the contracts in accordance',
36711:'with the far. this step is to provide reasonable assurance that the work for which costs are being estimated is',
36712:'being performed as contracted. agency e contracting officers have a key role in the systems of controls and validation procedures',
36713:'by ensuring that specific clauses are included in the contracts and that contract terms and conditions are adhered to by',
36714:'the contractor. 44. agencyelogistics personnel,actingasgovernmentpropertyadministrators,conduct reviews to assess the effectiveness of the contractor’s government property management systems. 45. program and',
36715:'project managers review the information provided by contractors against established plans and approve or disapprove contractor reported incurred costs, as',
36716:'appropriate. this critical information supports the reasonableness of contractor provided information. calculation of estimate 46. agencyfinancepersonnelperformreviewsoftheinformationreportedbycontractorspriorto recording gpp&e estimates. periodic',
36717:'validation procedures may include performing analytical procedures over the account balances to explain periodtoperiod fluctuations, reconciling the data reported by',
36718:'the contractor to the agencys financial system, tracing activity to supporting documentation, and validating ownership of property. the provisions of',
36719:'thistechnical release need not be applied to immaterial items. page 15 technical release 13 fasab handbook, version 20 06/21 technical',
36720:'release 13 appendixa: basis for conclusions a1. in january2008,theaccounting andauditpolicycommitteeestablishedthe general property, plant, & equipment gpp&e task force to assist',
36721:'in developing implementation guidance for federal gpp&e as it relates to sffas 6, accounting for pp&e, sffas 23, eliminating the',
36722:'category national defense property plant, & equipment, and other related gpp&e guidance developed by the fasab. the task force included',
36723:'federal agency representatives who were experiencing gpp&e implementation issues and those who have gpp&e implementation best practices to share with',
36724:'the federal community. a2. the gpp&e task force was divided into four subgroups that addressed a set of related issues.',
36725:'the subgroups met separately on a regular basis to discuss their set of issues and reported back to the full',
36726:'task force on its progress towards the development of implementation guidance. the four subgroups were: gpp&eacquisition gpp&e use gpp&e disposal',
36727:'gpp&e records retention a3. this guidancewas developedbytheacquisition subgroup. thesubgroupincluded members from the following federal agencies: department of defense department of',
36728:'energy department of the interior governmentaccountabilityoffice generalservicesadministration nationalaeronauticsandspaceadministration a4. the purpose of this implementation guidance is to provide support and',
36729:'direction relative to the typesofestimating methodologiesand the documentation thatcould be used to support thevaluationestimatesasoutlinedinsffas6,23,and35. itdoesnotaddresstheneedto validate existence and completeness. this',
36730:'guidance provides a foundation for preparers to exercise judgment in formulating those estimates. a5. this implementation guide provides examples that',
36731:'federal entities can use as guidelines when developing gpp&e estimates of original transactional data historical costs in accordance with the',
36732:'standards. page 16 technical release 13 fasab handbook, version 20 06/21 technical release 13 a6. theaapc releasedtheexposuredrafted, implementation guidance for',
36733:'estimating the historical cost of general property, plant, and equipment on december 10, 2010. upon release of the ed, notices',
36734:'and/or press releases were provided to: the federal register, the fasab news, the journal of accountancy, aga today, the cpa',
36735:'journal, government executive, the cpa letter, and committees of professional associations commenting on past exposure drafts. a7. fifteen letters were',
36736:'received from the following sources: federal internal nonfederal external users, academics, others 2 auditors 3 preparers and financial managers 10',
36737:'a8. respondents were primarily supportive of the examples provided. some respondents provided editorial suggestions and many were adopted. records retention',
36738:'requirements presented in the exposure draft a9. the committee asked readers of the exposure draft to comment on the proposed',
36739:'recommendations of theaapc gpp&e task force records retention subgroup. no changes were suggested by respondents and these recommendations have now',
36740:'been forwarded to the nationalarchives and recordsadministration nara for consideration. through its general records schedule grs naraspecifies the minimum period',
36741:'for retaining paper and electronic financial records documenting the acquisition of pp&e. the federalacquisition regulation far also provides guidance for',
36742:'retaining historical cost data. the subgroup was tasked with developing recommendations for the consistent records retention policies specifically for gpp&e.',
36743:'a10.the objective of the records retention subgroup was to look into the issue of records retention timeframes and methods hardcopy',
36744:'vs. electronic for records that support gpp& e reported in agencies’ general purpose financial statements and make costbeneficial recommendations. the',
36745:'subgroup found that policiesvarying regarding retention timeframes and the types of recordsto support assertions related to gpp&e. the subgroup’s research',
36746:'and recommendations were limited to records retention guidance and practices for the gpp& e category. page 17 technical release 13',
36747:'fasab handbook, version 20 06/21 technical release 13 appendix b:abbreviations aapc accountingandauditingpolicycommittee aicpa americaninstituteofcertifiedpublicaccountants aup agreed upon procedures cefms corps',
36748:'of engineers financial management system cip construction in process coemis corps of engineers management information system dis dateinservice far federalacquisitionregulation',
36749:'fasab federalaccountingstandardsadvisoryboard fasb financialaccountingstandards board gao governmentaccountabilityoffice gpp&e general property, plant, and equipment grs general records schedule ipa independentpublicaccountant nara',
36750:'nationalarchivesandrecordsadministration oig office of the inspector general omb office of management and budget pb president’s budget pp&e property, plant, and',
36751:'equipment sas statementonauditingstandards sffas statementoffederalfinancialaccountingstandards tr technical release usace unitedstatesarmycorpsofengineers uscg united states coast guard page 18 technical release 13',
36752:'fasab handbook, version 20 06/21 technical release 14: implementation guidance on the accounting for the disposal of general property, plant,',
36753:'and equipment status issued effective date affects affected by october 6, 2011 upon issuance none. none. summary this technical release',
36754:'addresses implementation guidancethat further clarifiesexisting sffas 6 requirements for the disposal, retirement, or removal from service of general property, plant,',
36755:'and equipment as well as related cleanup costs. the implementation guidance should help differentiate between permanent and other than permanent',
36756:'removal from service of gpp&e assets. the implementation guidance also recognizes the many complexities involved in the disposalof gpp&e, as',
36757:'well asdelineates eventsthat trigger discontinuation of depreciation and removal of gpp&e from accounting records. page 1 technical release 14 fasab',
36758:'handbook, version 20 06/21 technical release 14 table of contents page summary 1 introduction 3 effective date 3 technical guidance',
36759:'4 appendixa:basis for conclusions 8 appendix b: illustrations 12 appendix c:abbreviations 20 appendix d: glossary 21 page 2 technical release',
36760:'14 fasab handbook, version 20 06/21 technical release 14 introduction purpose 1. statementoffederalfinancialaccountingstandards sffas6, accounting for property, plant, and equipment,',
36761:'paragraphs 38 and 39 outlines the requirements for the disposal, retirement, or removal from service of general property, plant, and',
36762:'equipment gpp&e. sffas 6 paragraphs 97 and 98 outlines the requirements for recognition and measurement of disposal related cleanup costs.',
36763:'theaccounting andauditing policy committee aapc gpp&e disposal subgroup requested implementation guidance to clarify these requirements. many question whether the existing',
36764:'guidance applies solely to permanent removal from service of gpp&e assets. for example, sffas 6 does not provide guidance regarding',
36765:'gpp&e returned to service because removal was not permanent, such as whether the valuation should be restored to acquisition cost',
36766:'or remain at net realizable value. uncertainty regarding the application of sffas 6 provisions to gpp& e not permanently removed',
36767:'from service as well as uncertainty in determining when removal is permanent contributes to inconsistencies in interpretation and implementation of',
36768:'the standards. 2. implementationguidanceisneededtorecognizethemanycomplexitiesinvolvedindisposal of gpp&e and should identify events that trigger discontinuation of depreciation and removal of gpp&e from',
36769:'accounting records. the purpose of this technical release is to provide implementation guidance that further clarifies the requirements stated in',
36770:'the above noted sffas 6 paragraphs. scope 3. readers of this technical release should first refer to the hierarchy of',
36771:'accounting standards in sffas 34, the hierarchy of generally accepted accounting principles, including the application of standards issued by the',
36772:'financial accounting standards board.this technical release supplements the relevant accounting standards, but is not a substitute for and does not',
36773:'take precedence over the standards. this technical release clarifies, but does not change, guidance previously provided in sffas 6. effective',
36774:'date 4. this technical release is effective upon issuance. page 3 technical release 14 fasab handbook, version 20 06/21 technical',
36775:'release 14 technical guidance sffas 6: disposal of gpp&e 5. inaccordancewithsffas6paragraph38, “intheperiodofdisposal,retirement,orremoval from service, general pp&e shall be removed from',
36776:'the asset accounts along with associated accumulated depreciation/amortization.” further, paragraph 39 bold added1 states that: general pp&e shall be removed',
36777:'from general pp&e accounts along with associated accumulated depreciation/amortization, if prior to disposal, retirement or removal from service, it no',
36778:'longerprovides service in theoperationsof the entity. thiseithercould be because it has suffered damage, becomes obsolete in advance of expectations, or',
36779:'is identified as excess. it shall be recorded in an appropriate asset account at its expected net realizable value.any difference',
36780:'in the book value of the pp&e and its expected net realizable value shall be recognized as a gain or',
36781:'a loss in the period of adjustment. the expected net realizable value shall be adjusted at the end of each',
36782:'accounting period and anyfurther adjustmentsin value recognized asa gain or a loss. however, no additional depreciation/amortization shall be taken once',
36783:'such assets are removed from general pp&e in anticipation of disposal, retirement, or removal from service. sffas 6: recognition of',
36784:'cleanup costsassociated with disposal of gpp& e 6. additionally, sffas 6 provides requirements for recognition and measurement of disposal related',
36785:'cleanup costs. in accordance with paragraphs 97 and 98: aportion of estimated total cleanup costs shall be recognized as expense',
36786:'during each period that general pp&e is in operation. this shall be accomplished in a systematic and rational manner based',
36787:'on use of the physical capacity of the associated pp&e e.g., expected usable landfill area whenever possible. if physical capacity',
36788:'is not applicable or estimable, the estimated useful life of the associated pp&e mayserve as 1 terms defined in the',
36789:'glossary are shown in boldface type the first time they appear. page 4 technical release 14 fasab handbook, version 20',
36790:'06/21 technical release 14 the basis for systematic and rational recognition of expense and accumulation of the liability. recognitionofthe expense',
36791:'andaccumulationofthe liabilityshallbegin onthe date that the pp&e is placed into service, continue in each period that operation continues, and be',
36792:'completed when the pp&e ceases operation. other than permanent vs. permanent removal from service 7. the following section provides further',
36793:'clarification and guidance to the requirements stated in sffas 6, paragraphs 38, 39, 97, and 98 as those paragraphs relate',
36794:'to “removal from service.” the terms “disposal” and “retirement” are used in the above referenced sffas 6 paragraphs and are',
36795:'intended to describe gpp&e disposals that are permanent in nature. however, “removal from service” may or may not be permanent.',
36796:'the paragraph below defines the term “removal from service”, as referenced in sffas 6, and further discusses the differences between',
36797:'other than permanent and permanent removal from service. 8. “removalfrom service”2is definedasaneventthatterminatesthe useofagpp&easset e.g., shut down of a facility. removal',
36798:'from service may occur because of a change in the manner or duration of use, change in technology or obsolescence,',
36799:'damage by natural disaster, or identified as excess to entity’s mission needs. the removal from service should be considered other',
36800:'than permanent, unless there is evidence of management’s documented decision to permanently remove the asset from service and the asset’s',
36801:'use is terminated.3 permanent removal from service is evident from management’s documented decision to dispose of an asset by selling,',
36802:'scrapping, recycling, donating or demolishing the asset. an entity’s policies and procedures should require that documentation exists of management’s decision',
36803:'to permanently remove an asset from service. 9. management’s decision to remove from service is evidenced by the actions taken',
36804:'to commence the retirement and/or disposal process in accordance with the entity’s policies and procedures. other than permanent removal from',
36805:'service is evidenced by activities such as continuing lowlevel maintenance to sustain the asset in a recoverable status or until',
36806:'reutilization efforts are exhausted. for example, processing an aircraft or idling a 2 the term “removal from service” does not',
36807:'include the “out grant” of an asset. “out grant” is defined as interest or right granted to another entity to',
36808:'use government property by a lease, easement, license, or permit. therefore, “removal from service” as defined in this document does',
36809:'not apply to out granted assets, because the government retains its ownership in the property and only the use of',
36810:'the property is given to the entity using the out granted asset. 3theagency’s managementmay elect to identify and/orclassify the operationalstatus',
36811:'of assets to include those other than permanently removed from service in the property accountability system. page 5 technical release',
36812:'14 fasab handbook, version 20 06/21 technical release 14 facility in such a way as to retain the potential for',
36813:'its future operability would be persuasive evidence of intent to preserve an option to return the asset to service if',
36814:'warranted by evolving mission requirements. 10. two business events are necessary for the permanent removal from service: 1. asset’s use',
36815:'is terminated, and 2. there is documented evidence of management’s decision to permanently remove the asset from service. if only',
36816:'one of the two business events has occurred, permanent removal from service has not occurred i.e., considered other than permanent',
36817:'removal and there is no change in the gpp&e reported value and depreciation continues. likewise, in the case of gpp&e',
36818:'cleanup costs, if only one of the two business events has occurred, permanent removal from service has not occurred i.e.,',
36819:'considered other than permanent removal and, any cleanup costs associated with disposal, closure, and/or shutdown should continue to accumulate as',
36820:'a liability in accordance with sffas 6, paragraphs 97 and 98. financialaccounting transactions 11. the following section describes the financial',
36821:'accounting transactions that result from permanentremoval,retirement,and/ordisposalofgpp&e. nodisposalrelatedentriesare recognized prior to permanent removal from service. 12. gpp&eacquisitioncost&depreciationatpermanentremoval whentheentity’s management decides to',
36822:'permanently remove, retire, and/or dispose of an asset from service and the asset’s use is terminated, the asset’s acquisition cost',
36823:'and associated accumulateddepreciation areremoved fromthegpp&eaccount andtheasset isrecorded at its net realizable value with an offsetting entry to gain or loss.4',
36824:'upon completion of the disposal of the asset, the entity should write off the asset from its financial records. any',
36825:'difference between the expected net realizable value of the gpp&e previously recorded and the actual disposition amount should be recognized',
36826:'as a gain or loss. 4refer toappendix b: table 1: scenarios i & ii, step 2 for account transactions. page',
36827:'6 technical release 14 fasab handbook, version 20 06/21 technical release 14 13. spare parts and subcomponents if during the',
36828:'permanent removal process, the asset is dissembledandsparepartsorsubcomponentsaresalvagedtobeusedforotherpurposes, the spare parts or subcomponents should be recorded as new and separate assets',
36829:'in accordance with sffas 6 or sffas 3, accounting for inventory and related property. 14. gpp&eacquisitioncost&depreciationatother thanpermanentremoval iftheasset’s normal use',
36830:'is terminated but management has not decided to permanently remove the asset from service, the asset’s removal is considered other',
36831:'than permanent. in this case, there is no change in the gpp&e reported value and depreciation continues.5 likewise, if the',
36832:'asset is still in use even thoughmanagement hasdecidedto permanentlyremove, retire and/ordisposeoftheasset,thepermanentremovalfromservicehasnotoccurred. thereis also no change in the gpp&e reported value',
36833:'and depreciation continues.6 15. gpp&e cleanup costs7 for assets permanently removed from service, the cleanup cost liability associated with the',
36834:'disposal, closure, and/or shutdown of the gpp&e should be recognized in full. if removal from service is considered other than',
36835:'permanent, the liability and associated clean up cost expense shall continue to accumulate.8 16. gpp&e disposal when group or composite',
36836:'depreciation is used gpp&e subject to a group or composite method of depreciation should only apply the accounting transactions outlined',
36837:'in paragraph 12 when the entire group has been permanently removed from service e.g., as if the entire group were',
36838:'one asset. under the group or composite depreciation methods, no gain or loss is recognized on the sale of an',
36839:'asset within the group prior to removal of all assets in the group. the pro rata share of the total',
36840:'original group cost may be used to determine the cost of an asset within the group. 17. table1inappendixbillustrates twodifferentscenarios,associatedbusinessevents, and',
36841:'derived financial transactions to assist in interpretation and application of the guidance described in paragraphs 1115. the provisions of this',
36842:'technical release need not be applied to immaterial items. 5 refer toappendix b: table 1, scenario i, step 1. 6refer',
36843:'toappendix b: table 1, scenario ii, step 1. 7 sffas 6, paragraph 85: cleanup costs are the costs of removing,',
36844:'containing, and/or disposing of 1 hazardous waste from property, or 2 material and/or property that consists of hazardous waste at',
36845:'permanent or temporary closure or shutdown of associated pp&e. 8regardless of whencleanupis executed, at temporary or permanent shut down, as',
36846:'cleanup costs are paid, payments shall be recognized as a reduction in the liability for cleanup costs. sffas 6, paragraph',
36847:'100 page 7 technical release 14 fasab handbook, version 20 06/21 technical release 14 appendixa: basis for conclusions a1. in',
36848:'january2008,theaccounting andauditpolicycommitteeestablishedthe general property, plant, & equipment gpp&e task force to assist in developing implementation guidance for federal gpp&e as',
36849:'it relates to sffas 6, accounting for property, plant, and equipment, sffas 23, eliminating the category national defense property plant,',
36850:'& equipment, and other related gpp&e guidance developed by the fasab. the task force included federal agency representatives who were',
36851:'experiencing gpp&e implementation issuesandthose who have gpp&e implementationbest practicesto share with the federal community. a2. the gpp&e task force was',
36852:'divided into four subgroups that addressed a set of related issues. the subgroups met separately on a regular basis to',
36853:'discuss their set of issues and reported back to the full task force on its progress towards the development of',
36854:'implementation guidance. the four original subgroups were: gpp&eacquisition gpp&e use gpp&e disposal gpp&e records retention afifth subgroup gpp&e costaccounting issues',
36855:'was added recently to address the complexities of allocating programmatic, managerial, and administrative costs to gpp&e. a3. this guidance was',
36856:'developed by the disposal subgroup. the subgroup included members from the following federal agencies: department of defense department of energy',
36857:'department of the interior governmentaccountabilityoffice generalservicesadministration nationalaeronauticsandspaceadministration the subgroup included accountants, program managers, and functional pp&e experts. the program managers',
36858:'gave the subgroup the perspective of how the standards come into play on a daytoday basis. a4. the scope of',
36859:'the implementation guidance is to address gpp&e disposal as it applies to sffas 6. the guide focuses on when gpp&e',
36860:'is disposed, retired, or removed from service. page 8 technical release 14 fasab handbook, version 20 06/21 technical release 14',
36861:'a5. this implementation guide provides steps that can be followed to help federal entities consistently apply existing standards in providing',
36862:'consistent and comparable information. a6. in reaching its conclusions, the subgroup deemed significant the unanimous agreement of its members that',
36863:'sffas 6 as currently written applies only to permanent removal from service of gpp&e assets. because some gpp&e is removed',
36864:'from service in other than a permanent manner there are inconsistencies in interpretation and implementation of the guidance. the subgroup',
36865:'members presented numerous compelling examples of misinterpretation, confusion, and inefficient implementation. the subgroup was convinced that guidance is needed to',
36866:'clarify when gpp&e has been removed from service as envisioned in sffas 6. a7. additionally, subgroup members universally felt strongly',
36867:'that the implementation guidance should considerthecost vs. benefitsof themanycomplexitiesinvolved ingpp&edisposal, retirement, or removal from service and recognize the potential for',
36868:'reversing disposal decisions as mission requirements change. therefore, the subgroup members decided to focusonpermanentremovalfromserviceand ultimatelycontinuingto depreciate and report assets as',
36869:'gpp&e that are other than permanently removed from service. the following reasons were discussed: a. depreciation is a method of',
36870:'allocating the cost of the asset to those periods expected to benefit from use of the asset. when assets are',
36871:'other than permanently removed from service, there is a great possibility of returning the assets to service; therefore management continues',
36872:'to maintain the assets in a mission ready status and the assets are available for use. given this, the entity',
36873:'should continue depreciating its assets. b. the subgroup members determined that the complexity and cost of continually suspending and reinstating',
36874:'depreciation for assets other than permanently removed from service outweighs the benefits. further, sffas 6 does not provide guidance for',
36875:'the recognition of assets returned to service following other than permanent removal. c. current guidance requires depreciation to be captured',
36876:'until the asset is either fully depreciated or permanently removed from service. in the cases where an entity depreciates its',
36877:'gpp&e based on actual usage or production, the depreciation expense for the entity would stop when the asset is not',
36878:'in use. for example, an agency can decide to use a depreciation method, such as flying hours, that would account',
36879:'for an asset’s ‘lack of activity.’ d. changes in value or useful livesof assetsremaining in service regardlessof the reason e.g.',
36880:'impairment are outside of the scope of this document. page 9 technical release 14 fasab handbook, version 20 06/21 technical',
36881:'release 14 a8. the benefits of this guidance are: 1 it facilitates comparable implementation of federal accounting standards; and 2',
36882:'it supports federal financial reporting objectives including the assessment of the performance of agencies in managing the cost and disposition',
36883:'of federal assets. a9. as part of the implementation of this guide, the federal agencies may incur additional costs to:',
36884:'1 review and adjust the expected net realizable value at the end of each accounting period and any further adjustments',
36885:'in value recognized as a gain or a loss; 2 periodically reviewthestatusof thoseassetsintheotherthanpermanentlyremovedfromservicegroup, but not all pp&e, to determine if',
36886:'any changes in status or actions would trigger a change in gpp&e recognition; and 3 demonstrate and support managements intent',
36887:'to retain an asset for future use or permanently dispose of the asset and any associated financial transactions, when applicable.',
36888:'a10.the guidance defines “removal from service” as an event that terminates the use of a gpp& e asset e.g., shut',
36889:'down of a facility. management’s decision to remove from service is evidenced by the actions taken in accordance with the',
36890:'entity’s policies and procedures to commence the retirement and/or disposal process. permanent removal from service is evident from management’s documented',
36891:'decision to dispose of an asset by selling including selling the asset to another entity for use as its original',
36892:'intended purpose, scrapping, recycling, donating or demolishing the asset. removal from service may occur because of a change in the',
36893:'manner or duration of use, change in technology or obsolescence, damagebynatural disaster,oridentified asexcesstoentity’smissionneeds. a11.the exposure draft, implementation guidance on the',
36894:'accounting for the disposal of general property, plant, & equipment, was issued december 10, 2010, with comments requested by february',
36895:'11, 2011. upon release of the exposure draft, notices and press releaseswereprovidedtothefederalregister, fasab news,the journal of accountancy, aga today, the',
36896:'cpa journal, government executive, the cpa letter, and government accounting and auditing update, the cfo council, the council of inspectors',
36897:'general on integrity and efficiency, and the financial statementaudit network, and, committees of professional associations generally commenting on exposure drafts',
36898:'in the past. a12.eighteen letters were received from the following sources: federal internal nonfederal external users, academics, others 3 auditors',
36899:'3 2 preparers and financial managers 10 page 10 technical release 14 fasab handbook, version 20 06/21 technical release 14',
36900:'a13.respondents were predominantly supportive of the implementation guidance. some respondents provided editorial suggestions and many were adopted. one respondent expressed',
36901:'the view that introduction of two key terms – temporary and permanent removal from service – which bifurcate the principles',
36902:'established in sffas 6 is inappropriate in a technical release. theaapc believes sffas 6 addresses only permanent removal from service.toavoid',
36903:'introducingthenewphrase “temporaryremovalfromservice” theguidance proposed in the exposure draft was revised to “other than permanently removed from service.” a14.the technical release',
36904:'was approved by theaapc for release to the fasab for issuance. the board has reviewed thistechnical release and a majorityof',
36905:'its members do not object to its issuance. page 11 technical release 14 fasab handbook, version 20 06/21 technical release',
36906:'14 appendix b: illustrations table 1: disposal, retirement, removal business events & financial accounting transactions table 1 below illustrates two',
36907:'different scenarios, associated business events, and derived financial accounting transactions to assist in interpretation and application of the guidance described',
36908:'in paragraphs 1115. further, it demonstrates that both business events steps 1 and 2 must be in place to trigger',
36909:'a disposal financial transaction in accordance with sffas 6. these illustrative financial transactions are considered nonauthoritative guidance and are presented',
36910:'to show how the standards may be applied but are not standards themselves. these illustrations are general in nature and',
36911:'may not apply to specific cases that appear similar but have unique circumstances. scenariosfor sffas 6 business event financial event',
36912:'proprietary disposal financial accounting transaction for illustrative purposes only9 scenerio i: step 1: step 1: none step 1. asset’s use',
36913:'is no change in the financial asset’s use terminated and status. continue to carry is first removed from book value',
36914:'in gpp&e terminated. service e.g., asset is vacated, abandoned, or deactivated.at this point the removal from service termination of use',
36915:'is deemed other than permanent until management documents that it has decided to permanently retire/dispose of the asset shown in',
36916:'step 2. account and depreciate page 12 technical release 14 fasab handbook, version 20 06/21 technical release 14 scenariosfor sffas',
36917:'6 business event financial event proprietary disposal financial accounting transaction for illustrative purposes only9 step 2. later management decides to',
36918:'permanently retire and/or dispose of the asset. step 2: management decides to permanently retire and/or dispose of the asset and',
36919:'documents its decision. step 2: reclassify and remove gpp& e and associated accumulated depreciation from the gpp&e account. record asset',
36920:'at the net realizable value. any difference between the book value of the gpp&e and the expected net realizable value',
36921:'should be recognized as a gain or a loss. recognize any unallocated/unamortized portion of the total estimated cleanup costs. debit',
36922:'gpp&e permanently removed but not yet disposed debit accumulated depreciation on improvements to land debit accumulated depreciation on buildings, improvements,',
36923:'and renovations debit accumulated depreciation on other structures and facilities debit accumulated depreciation on equipment debit accumulated depreciationon assets under',
36924:'capital lease debit accumulated amortization on leasehold improvements debit losses credit gains credit land and land rights credit improvements to',
36925:'land credit buildings, improvements, and renovations credit other structures and facilities credit equipment credit assets under capital lease page 13',
36926:'technical release 14 fasab handbook, version 20 06/21 technical release 14 scenariosfor sffas 6 business event financial event proprietary disposal',
36927:'financial accounting transaction for illustrative purposes only9 credit leasehold improvements debit future funded expenses credit estimated cleanup cost liability step',
36928:'3: step 3: debit fund balance with treasury disposition is completed. the title and/or any legal interest in the asset',
36929:'has been transferred and/or ceased. e.g., transfer/sale document or title has been signed and executed by the appropriate authority write',
36930:'off the asset from financial records and statements. any difference between the expected net realizable value of the gpp&e previously',
36931:'recorded andthe actual disposition amount should be recognized as a gain or loss. debit accounts receivable debit losses on disposition',
36932:'of assets credit gpp&e permanently removed but not yet disposed credit gains on disposition of assets scenerio ii: step 1.',
36933:'first management decides to permanently retire and/or dispose of the asset while the entity continues to use/operate the asset. step',
36934:'1: management decides to permanently retire and/or dispose of the asset and documents its decision. at this point, the entity',
36935:'continues to use the asset. step 1: no change in the financial status. continue to carry book value in gpp&e',
36936:'account and depreciate none page 14 technical release 14 fasab handbook, version 20 06/21 technical release 14 scenariosfor sffas 6',
36937:'business event financial event proprietary disposal financial accounting transaction for illustrative purposes only9 step 2. later the decision is made',
36938:'to terminate the asset’s use/operatio n. step 2: asset’s use is terminated and removed from service e.g., asset is vacated,',
36939:'abandoned, or deactivated. step 2: reclassify and remove gpp& e and associated accumulated depreciation from the gpp&e account. record asset',
36940:'at the net realizable value. any difference between the book value of the gpp&e and the expected net realizable value',
36941:'should be recognized as a gain or a loss recognize any unallocated/unamortized portion of the total estimated cleanup costs. debit',
36942:'gpp&e permanently removed but not yet disposed debit accumulated depreciation on improvements to land debit accumulated depreciation on buildings, improvements,',
36943:'and renovations debit accumulated depreciation on other structures and facilities debit accumulated depreciation on equipment debit accumulated depreciation on assets',
36944:'under capital lease debit accumulated amortization on leasehold improvements debit losses credit gains credit land and land rights credit improvements',
36945:'to land credit buildings, improvements, and renovations credit other structures and facilities credit equipment credit assets under capital lease page',
36946:'15 technical release 14 fasab handbook, version 20 06/21 technical release 14 scenariosfor sffas 6 business event financial event proprietary',
36947:'disposal financial accounting transaction for illustrative purposes only9 credit leasehold improvements debit future funded expenses credit estimated cleanup cost liability',
36948:'step 3: step 3: debit fund balance with treasury disposition is completed. the title and/or any legal interest in the',
36949:'asset has been transferred and/or ceased. e.g., transfer/sale document or title has been signed and executed by the appropriate authority',
36950:'write off the asset from financial records and statements. any difference between the expected net realizable value of the gpp&e',
36951:'previously recorded andthe actual disposition amount should be recognized as a gain or loss. debit accounts receivable debit losses on',
36952:'disposition of assets credit gpp&e permanently removed but not yet disposed credit gains on disposition of assets 9any combination of',
36953:'these accounts could be recorded depending on the specifics of the individual transactions. for further guidance on account transactions, numbers',
36954:'and definitions, please refer to ussgltreasury financial manual tfm at http://www.fms.treas.gov/ussgl/tfmreleases/0902/2010/part2current.html . example of practice b1. the example of practice',
36955:'shown in the following table is for illustrative purposes only. the explanations and illustrations are presented to show how the',
36956:'standards may be applied but are not standards themselves. these illustrations are general in nature and may not apply to',
36957:'specific cases that appear similar but have unique circumstances. b2. thetableillustratesafederalentity’svariousactionsthatmaybeconsideredasevidenceof itsmanagement’s decision to either permanently remove, retire, and/or dispose',
36958:'of the asset or to retain the asset for future use i.e., other than permanent removal from service. b3. afederalentitywouldnormallycategorizeassetsthathavebeenremovedfromservicei.e.,',
36959:'use has been terminated into one of the following three categories: page 16 technical release 14 fasab handbook, version 20',
36960:'06/21 technical release 14 retain asset for future use, set aside for future disposal, or imminent planned disposal. b4. afederalentitywouldnormallyaccountforitsgpp&einaccordancewithsffas6aswell',
36961:'as the requirements for each category as established by the entity’s policies and procedures. the following table outlines the processes',
36962:'the entity may undertake when preparing its gpp&e for assignment to each of the categories. the actions outlined for categories',
36963:'2 and 3 may be used as evidence of management’s decision to permanently remove the asset from service, terminate its',
36964:'use and dispose of the asset. once management’s decision is identified, using scenarios in table 1, the relevant financial accounting',
36965:'transactions can be determined and recorded. page 17 technical release 14 fasab handbook, version 20 06/21 technical release 14 table2:',
36966:'illustrationsofmanagement’sactionsdemonstratingdecision for other than permanent or permanent removal/retirement/disposal when the gpp&e is not in use actions demonstrating management’s decision category',
36967:'1 category 2 category 3 other than permanent permanent retain for future use gpp&e is not in use setaside for',
36968:'future disposal gpp&e is not in use imminent planned disposal gpp&e is not in use management declare and report as',
36969:'“vacant” x x x declare and report as “excess” x x expend maintenance, sustainment, and repair funds as needed to',
36970:'maintain a watertight asset x x x conduct assessment to identify environmental issues x x complete required disposal documentation x',
36971:'x maintenance maintain utilities in acceptable condition i.e., fully functioning x winterize plumbing if required by local weather conditions x',
36972:'conduct sufficient grounds maintenance to preclude unsightliness x x x maintain security to prevent vandalism and unauthorized use x x',
36973:'x retain equipment and spare parts10 on asset x install equipment and conduct maintenanceproceduresrequired to preserve interior space x decommissioning',
36974:'clean x x dispose of excess personal property x x x page 18 technical release 14 fasab handbook, version 20',
36975:'06/21 technical release 14 actions demonstrating management’s decision category 1 category 2 category 3 other than permanent permanent retain for',
36976:'future use gpp&e is not in use setaside for future disposal gpp&e is not in use imminent planned disposal gpp&e',
36977:'is not in use turn off air conditioning x x maintain heat to prevent frozen pipes x disconnect utilities but',
36978:'maintain supply x x drain water x x disconnect utilities and remove supply x x remove air conditioning/heating units/plumbingfixturesforfuture use',
36979:'or disposal x x strip asset of attached equipment and spare parts for use on other assets x x remove',
36980:'all other fixtures and sell if salvageable x x dismantle asset x x remove contaminants if identified by environmental assessment.',
36981:'x x 10examples of spare parts may include mechanical & electrical repair parts, electronic spares, maintenance assistance modules, and ready',
36982:'service spares. page 19 technical release 14 fasab handbook, version 20 06/21 technical release 14 appendix c:abbreviations aapc accounting and',
36983:'auditing policy committee fasab federal accounting standardsadvisory board gpp&e general property, plant, and equipment sffas statement of federal financial accounting',
36984:'standards tr technical release page 20 technical release 14 fasab handbook, version 20 06/21 technical release 14 appendix d: glossary',
36985:'term definition excess11 the term excess property means property under the control of a federal agency that the head of',
36986:'the agency determines isnot required to meet the agencysneedsor responsibilities net realizable value12 the estimated amount that can be recovered',
36987:'from selling, or any other method of disposing of an item less estimated costs of completion, holding and disposal. obsolete13',
36988:'pp&e no longer needed due to changes in technology, laws, customs, or operations. 1140 usc section 102 12fasab consolidated glossary:',
36989:'http://www.fasab.gov/pdffiles/codificationreport2008.pdf 13derived from fasab’s definition for “obsolete inventory.” see sffas 3, accounting for inventory and related property, par 29. page',
36990:'21 technical release 14 fasab handbook, version 20 06/21 technical release 15: implementation guidance for general property, plant, and equipment',
36991:'costaccumulation,assignment andallocation status issued effective date affects affected by september 26, 2013 effective upon issuance none. technical release 17. summary',
36992:'the implementation guidance promotes an understanding of organizational considerations that affect the application of the standards for general property, plant,',
36993:'and equipment gpp&e except for internal use software. the implementation guidance relates to: a recognitionrequirementsforprogrammatic,managerial,administrative,andotherelements of program costs incurred during',
36994:'the gpp&e lifecycle, decisions regarding the granularity of cost information, and acceptable methods for recognizing those costs i.e., capital costs',
36995:'captured on the balance sheet or period expense costs captured on the statement of net costs [snc], b the concept',
36996:'of a cost accumulation and allocation decision framework i.e., acceptable methods of accumulating, assigning, and reporting cost data, and c',
36997:'managements role in applying the cost accumulation, assignment, and allocation decision framework. one of the objectives of this technical release',
36998:'is to enable federal reporting entities to use a consistent framework to apply existing guidance. the guidance also supports the',
36999:'objectives of ensuring that transactionsinvolving gpp&e are recorded in accordance with federal accounting standards, and the cost of producing federal',
37000:'financialinformation, asit relates to establishing the cost of gpp&e, does not outweigh the benefitsderived bythe users of the financial information.',
37001:'lastly, it provides a decision framework flowchart to assist entity management in applying the principles described throughout the technical release.',
37002:'page 1 technical release 15 fasab handbook, version 20 06/21 technical release 15 table of contents page introduction 3 materiality',
37003:'6 scope 6 questions & answers 8 effective date 10 appendixa:basis for conclusions 12 appendix b: illustrations 16 appendix c:',
37004:'decision framework flowchart 23 appendix d:accountingliterature 25 appendix e:abbreviations 28 page 2 technical release 15 fasab handbook, version 20 06/21',
37005:'technical release 15 introduction purpose 1. statementoffederalfinancialaccountingstandards6sffas6, accounting for property, plant, and equipment, as amended outlines the recognition requirements for',
37006:'general property, plant, and equipment gpp&e except for internal use software. paragraph 26 states that, all general pp&e shall be',
37007:'recorded at cost. although the measurement basis for valuing general pp&e remainshistorical cost, reasonableestimatesmay beused to establishthe historical cost of',
37008:'general pp&e, in accordance with the asset recognition and measurement provisions herein. cost shall include all costs incurred to bring',
37009:'the pp&e to a form and location suitable for its intended use. theaapc gpp&e costaccounting issues subgroup was developed to',
37010:'address a request for implementation guidance for these requirements. 2. the implementation guidance promotes an understanding of organizational considerations that',
37011:'affect the application of the standards for general property, plant, and equipment gpp& e except for internal use software. the',
37012:'implementation guidance relates to: a. recognition requirements for programmatic, managerial, administrative, and other elements of program costs1 incurred during the',
37013:'gpp&e lifecycle, decisions regarding the granularity of cost information, and acceptable methods for recognizing those costs i.e., capital costs captured',
37014:'on the balance sheet or period expense costs captured on the statement of net costs [snc], b. the concept of',
37015:'a cost accumulation and allocation decision framework i.e., acceptable methods of accumulating, assigning, and reporting cost data, and c. managements',
37016:'role in applying the cost accumulation, assignment, and allocation decision framework. in promoting an understanding of the standards it is',
37017:'important to reiterate managements responsibilityto considerthe six2qualitativecharacteristicsoffinancialreportingestablished in statement of federal financialaccounting concepts sffac 1. more specifically, 1in this document,',
37018:'all subsequent references to these costs are collectively referred to as program costs. 2understandability, reliability, relevance, timeliness, consistency, and comparability',
37019:'sffac 1 paragraph 156 page 3 technical release 15 fasab handbook, version 20 06/21 technical release 15 management should bemindfulof',
37020:'comparabilitywhen establishingpoliciesandprocedures. this framework should aid management in selecting policies which are comparable because they are derived from underlying transactions',
37021:'or organizational characteristics rather than being attributable to preferences. 3. the accounting standards and related basis for conclusions consistently recognize',
37022:'managements role in interpreting and applying generally accepted accounting principles gaap i.e., managements decision framework to its respective entitys operational',
37023:'environment. thestandardsaremeanttoprovidewideranging,reasonable,andconsistent principles for reporting entities to operate within and to apply, respectively. for example, paragraph 3 of sffas 4,',
37024:'managerial cost accounting standards and concepts, states, these standards are based on sound cost accounting concepts and are broad enough',
37025:'to allow maximum flexibility for agency managers to develop costing methods that are best suited to their operational environment. 4.',
37026:'consistentwith managementsdecisionframework seedecisionframeworkflowchartat appendix c, this technical release is intended to reemphasize the framework aspect of the managerial cost accounting',
37027:'concepts and standards as they relate to gpp&e cost accounting and reporting as outlined in sffas 6 and sffas 4.',
37028:'background 5. theaccountingandauditingpolicycommittee aapcgpp&ecostaccountingissue cai subgroup was tasked with identifying and presenting recommendations to theaapc to address the complexities of',
37029:'allocating program costs to gpp&e consistent with the role of managements decision framework. thistechnical release tr addressesthe following three central',
37030:'components of gpp&e cost accounting and reporting: a. recognition requirements for programmatic, managerial, administrative, and other elements of program costs',
37031:'incurred during the gpp&e lifecycle, decisions regarding the granularity of cost information,, and acceptable methods for recognizing those costs i.e.,',
37032:'capital costs captured on the balance sheet or period expense costs captured on the statement of net costs [snc], b.',
37033:'the concept of a cost accumulation and allocation decision framework i.e., acceptable methods of accumulating, assigning, and reporting cost data,',
37034:'and c. managements role in applying the cost accumulation and allocation decision framework. page 4 technical release 15 fasab handbook,',
37035:'version 20 06/21 technical release 15 6. the decision framework is intended to be used as a tool for management',
37036:'to leverage and guide professional judgmentin the developmentand application of policiesand practices to accountforthecostincurred forgpp&ein accordance withgaap. everyentityhasunique requirements and',
37037:'needs for financial management information to enable the successful execution ofits mission and associated programs. further, each entity needs varying',
37038:'levels of precision and granularity when allocating costs to end outputs or objectives. therefore, each entity must assess and establish',
37039:'the appropriate cost benefit threshold for allocating program costs to gpp&e in accordance with gaap based on its mission requirements,',
37040:'operating environment, and stakeholder needs. the purpose of the decision framework is to provide guidelines and considerations, founded on a',
37041:'gpp&e acquisition lifecycle approach, to guide management through the application of the gpp&e accounting standards within their unique business environment.',
37042:'the decision framework incorporates the inherent application flexibility built into the accounting standards to assist management to reasonably apply the',
37043:'standards in order to appropriately recognize the cost of gpp&e within their unique operating environment. 7. the decision framework discussed',
37044:'in this technical release recognizes that the financial management information needs of stakeholders, both internal and external, vary by entity',
37045:'depending on the entitys characteristics.an entitys revenue source e.g., appropriated funds,revolvingfund,userfee,etc.significantlyimpactsthetypesofandlevelofcostdetail required to be allocated to end assets. for example,',
37046:'entities operating under a fee forservice or working capital fund structure may have a business need to accumulate and allocate',
37047:'relevant costs at a more granular level to ensure that their pricing models, rates andschedulesfacilitatethefullrecoveryofcostsunder anonappropriated,userfee model. 8. thefollowingthreeprinciplesmaybeusedbymanagementtodeterminetheirstakeholders financial',
37048:'management information needs: a. relevance/usefulness of information both to internal and external stakeholders; b. level of precision e.g., materiality needed',
37049:'to properly manage and report costs; and c. costbenefit of establishing and executing cost assignment processes, methods and tools.3 when',
37050:'applying the principles listed above, management should develop formalized policies and procedures documenting its decisions. such decisions should be based',
37051:'on an understanding oftheentitys mission andoperatingmodeland howthe entitysstakeholders use the information. 3a[costing] method is economically feasible if the benefits resulting',
37052:'from implementing the method outweigh its costs. it is not advantageous to use acosting method if it requires a large',
37053:'amount of resources and yet produces information of little value to users. sffas 4 paragraph 142 page 5 technical release',
37054:'15 fasab handbook, version 20 06/21 technical release 15 9. the decision framework described in the remainder of this technical',
37055:'release provides users with an organized approach for applying the principles described above to support their process for developing entity',
37056:'specific policies and procedures for accumulating, allocating, and reporting the cost of gpp&e in compliance with relevant accounting standards. 10.',
37057:'paragraph10was rescindedbytechnicalrelease 17. materiality 11. theprovisionsofthisstatementneednotbeappliedtoimmaterialitems. thedetermination of whether an item is material depends on the degree to which omitting',
37058:'or misstating information about the item makes it probable that the judgment of a reasonable person relying on the information',
37059:'would have been changed or influenced by the omission or the misstatement. scope 12. readersofthistechnicalreleaseshouldfirstrefertothehierarchyofaccountingstandards in sffas 34, the hierarchy',
37060:'of generally accepted accounting principles, including the application of standards issued by the financial accounting standards board.this technical release supplements',
37061:'the relevant accounting standards, but is not a substitute for and does not take precedence over the standards. this technical',
37062:'release clarifies but does not change guidance provided in sffas 4 or sffas 6 as amended. 13. this technical release',
37063:'does not address internal use software. see instead sffas 10, accounting for internal use software. summary of existing standards 14.',
37064:'sffas 6 paragraph 26 states: all general pp&e shall be recorded at cost. although the measurement basis for valuing general',
37065:'pp&e remains historical cost, reasonable estimates may be used to establish the historical cost of general pp&e, in accordance with',
37066:'the asset recognition and measurement provisions herein. cost shall include all costs incurred to bring the pp&e to a form',
37067:'and location suitable for its intended use. for example, the cost of acquiring property, plant, and equipment may include: page',
37068:'6 technical release 15 fasab handbook, version 20 06/21 technical release 15  amounts paid to vendors;  transportation charges',
37069:'to the point of initial use;  handling and storage costs;  labor and other direct or indirect production costs',
37070:'for assets produced or constructed;  engineering, architectural, and other outside services for designs, plans, specifications, and surveys;  acquisition',
37071:'and preparation costs of buildings and other facilities;  an appropriate share of the cost of the equipment and facilities',
37072:'used in construction work;  fixed equipmentand related installationcostsrequired foractivitiesin abuildingor facility;  direct costs of inspection, supervision, and administration',
37073:'of construction contracts and construction work;  legal and recording fees and damage claims;  fair value of facilities and',
37074:'equipment donated to the government; and  material amounts of interest costs paid [fn 16: interest costs refers to any',
37075:'interest paid by the reporting entity directly to providers of goods or services related to the acquisition or construction of',
37076:'pp&e.] 15. thetypesofcostsassignedtogpp&emayvarydependingoniftheassetispurchasedas a completed item, is contractor constructed, or is selfconstructed. sffas 6 specifically states that the costs recorded',
37077:'in gpp&e should include only those costs that bring the g pp&e to a form and location suitable for its',
37078:'intended use. these costs may include both direct and indirect costs. however, indirect production costs only occur when gpp&e are',
37079:'produced or constructed. 16. according to sffas 4, paragraph 90, direct costs are costs that can be specifically identified with',
37080:'an output. [for purposes of this guidance output is an item or items of gpp&e. ]afew examples of direct costs',
37081:'noted in sffas 6, paragraph 26, are amounts paid to vendors, labor and other direct production costs, an appropriate share',
37082:'of the cost of the equipment and facilities used in the construction work, and direct costs of inspection, supervision, and',
37083:'administration of construction contracts and construction work. the direct costs accumulated and identified as costs incurred to bring the gpp&e',
37084:'to a form and location suitableforitsintendeduse shouldbeassignedto thecostofthegpp&eitems. if the direct costs are not identified as costs incurred to bring',
37085:'the gpp&e to a form and location suitable for its intended use, then the costs should be expensed or capitalized',
37086:'in accordancewithotherstandards. theitemsofgpp&emustmeetorwillmeettheentitys capitalization threshold or other capitalization recognition criteria. 17. indirect costs are costs that cannot be identified specifically',
37087:'with or traced to a given cost object in an economically feasible way [sffas 6, glossary]. [for purposes of this',
37088:'guidance page 7 technical release 15 fasab handbook, version 20 06/21 technical release 15 cost object is an item or',
37089:'items of gpp&e.] the example of indirect costs noted in sffas 6, paragraph 26, is indirect production costs for assets',
37090:'produced or constructed. the indirect costs identified as costs incurred to bring the gpp&e to a form and location suitableforitsintendeduse',
37091:'should be accumulated, assignedor allocated to thecostofthe gpp&e items. if the accumulated indirect costs are not identified as costs incurred',
37092:'to bring the gpp&e to a form and location suitable for its intended use for example, administrative overheads that do',
37093:'not contribute to bringing the gpp&e item to a form and location suitable for its intended use, then the costs',
37094:'should be expensed. note also that if the items of gpp&e do not or will not meet the entitys capitalization',
37095:'criteria e.g., capitalization threshold then indirect costs are not a consideration. 18. afundamentalconceptpresentedinthistechnicalreleaseisthatitisreasonabletoexpect a difference in the level of granularity',
37096:'that federal entities use to allocate program costs to gpp&e. some entities have an inherent business/operational need to assign or',
37097:'allocate costs at a more granular level while others do not. this technical release emphasizes the concept that an entity',
37098:'managements role of establishing gaap compliant policies and processes includes a critical element of flexibility. the flexibility allows management to',
37099:'create and execute policies and procedures that fit within the gaap framework and align with the respective entitys business/operating model.',
37100:'19. the below guidance is presented as responses to the three issues, previously identified in this technical release, posed as',
37101:'questions. refer toappendix d, accounting literature for a more extensive presentation of accounting literature relevant to this discussion. questions &answers',
37102:'20. q1. sffas6,paragraph26,requiresgpp&etoberecordedatthecostsincurredtobring the gpp&e to a form and location suitable for its intended use. examples of costs of acquiring',
37103:'gpp&e are provided. does management have discretion in applying the cost assignment methods identified in sffas 4, paragraph 124, to',
37104:'accumulate acquisition costs? 21. a1. yes. sffas 4 establishes a principle for management to apply. of particular importance is the',
37105:'emphasis on economic feasibility with regard to direct tracing of costs to outputs. sffas 4, paragraph 124, provides that [in]',
37106:'principle, costs should be assigned to outputs in one of the methods listed below in the order of preference: a.',
37107:'directly tracing costs wherever economically feasible; b. assigning costs on a causeandeffect basis; and c. allocating costs on a reasonable',
37108:'and consistent basis. page 8 technical release 15 fasab handbook, version 20 06/21 technical release 15 22. each reporting entity',
37109:'should determine the appropriate detail for the cost accounting processesandproceduresusedtoidentifycostsincurredtobring thegpp&etoaformand condition suitable for its intended use per sffas 6,',
37110:'paragraph 26. the reporting entity should make this determination based on several factors, to include sffas 4, paragraph 72: a.',
37111:'nature of the entitys operations; b. precision needed in cost information to meet managerial needs, including cost recovery decisions; c.',
37112:'practicality of data collection and processing; d. availability of electronic data handling facilities; e. cost of installing, operating, and maintaining',
37113:'the cost accounting processes; and f. any specific information needs of management. 23. q2. howshouldgeneralmanagementandadministrativesupport beappliedinconsidering the acquisition cost of',
37114:'gpp&e? 24. a2. management should consider general management and administrative support costs when identifying the costs to bring the gpp&e',
37115:'to a form and location suitable for its intended use. entities may incur indirect costs4 that cannot be reasonably allocated',
37116:'to programs, segments, or outputs including gpp&e acquisition. because reporting entities havedifferent organizational structuresand missions, there will be differences in',
37117:'the levelof allocationofsuchcostsacrossalloutputsincludingitemsofgpp&e. sffas4, paragraph 92, explains that: areporting entity and its responsibility segments may incur general management and administrative',
37118:'support costs that cannot be traced, assigned, or allocated to segments and their outputs. these unassigned costs are part of',
37119:'the organization costs, and they should be reported on the entitys financial statements such as the statement of net costs',
37120:'as costs not assigned to programs. 25. q3. how does the principle of nonproduction costs apply in considering the acquisition',
37121:'cost of gpp&e? 26. a3. sffas 4, paragraph 104, explains that: aresponsibility segment may incur and recognize costs that are',
37122:'linked to events other than the production of goods and services. two examples of these non production costs were discussed',
37123:'earlier: ?1 other postemployment benefits 4indirect production costs only occur when gpp&e are produced or constructed. page 9 technical release',
37124:'15 fasab handbook, version 20 06/21 technical release 15 opeb costs that are recognized as expenses when an opeb event',
37125:'occurs, and 2 certain property acquisition costs that are recognized as expenses at the time of acquisition. other nonproduction costs',
37126:'include reorganization costs, and nonrecurring cleanup costs resulting from facility abandonments that are not accrued. since these costs are recognized',
37127:'for a period in which a particular event occurs, assigning these costs to goods and service produced in that period',
37128:'would distort the production costs. in special purpose cost studies, management may have reasons to determine historical output costs by',
37129:'distributing some of these costs to outputs over a number of past periods. such distribution may be appropriate when: a',
37130:'experience shows that the costs are recurring in a regular pattern, and b a nexus can be established between the',
37131:'costs and the production of outputs that may have benefited from those costs. nonproduction costs should not be assigned as',
37132:'gpp&e acquisition costs, for instance, losses that arise from a natural disaster should not be attributed to gpp&e acquisition costs',
37133:'even if the assets damaged are those being used to construct the gpp&e. for example, if cranes used in constructing',
37134:'a building are completely destroyed in a hurricane, the cost of such damage should be treated as nonproduction costs and',
37135:'not as costs incurred to bring the building to a form and location suitable for use. summary of illustrations 27.',
37136:'the decision framework supports development of accounting policies and practices appropriate to each organizationscharacteristicsin accordance with gaap. the framework is',
37137:'meant to provide parameters or principles for reporting entities to consider in developing organizational accounting policies and practices that will',
37138:'best support their operating models, provide the financial information necessary to manage programs, and report in accordance with gaap. reporting',
37139:'entities should report the full costs of outputs in the generalpurposefinancialreports. fullcostsmaybeexpensedorcapitalizedinaccordance with gaap and based on each entitys accounting',
37140:'policies and practices. 28. this technical release provides examples of three different agencies applying the framework see appendix b for',
37141:'examples, which demonstrate gaap compliant gpp&e cost accumulation and allocation methodologies appropriate for unique organizational characteristics including operating models. page',
37142:'10 technical release 15 fasab handbook, version 20 06/21 technical release 15 effective date 29. this technical release is effective',
37143:'upon issuance. the provisions of this technical release need not be applied to immaterial items. page 11 technical release 15',
37144:'fasab handbook, version 20 06/21 technical release 15 appendixa: basis for conclusions this appendix discusses some factors considered significant byaapc',
37145:'members in reaching the conclusions in this technical release. it includes the reasons for accepting certain approaches andrejectingothers. individualmembersgavegreater weight',
37146:'tosomefactorsthantoothers. the guidance enunciated in thistechnical releasenot the material in this appendixshould govern the accounting for specific transactions, events, or',
37147:'conditions. project history a1. in january2008,theaccounting andauditpolicycommitteeestablishedthe general property, plant, & equipment gpp&e task force to assist in developing implementation',
37148:'guidance for federal gpp&e as it relates to sffas 6, accounting for property, plant, & equipment, sffas 23, eliminating the',
37149:'category national defense property plant, & equipment, and other related gpp&e guidance developed by the fasab. the task force includes',
37150:'federal agency representatives who are experiencing gpp&e implementation issuesandthose who have gpp&e implementationbest practicesto share with the federal community. a2.',
37151:'the gpp&e task force was divided into four subgroups to address a set of related issues. the subgroups have met',
37152:'separately to discuss their set of issues and report back to the full task force on its progress towards the',
37153:'development of implementation guidance. the four subgroups are gpp&eacquisition gpp&e use gpp&e disposal gpp&e records retention a3. afifthsubgroup, thegpp&ecostaccountingissuescai,was later',
37154:'addedtoaddress the complexities of allocating programmatic, managerial, and administrative costs to gpp&e. the subgroups primary objective was to reinforce the',
37155:'fasabs provisions for federal reporting entities to apply a reasonable level of management interpretation and flexibility, within the standards, totheir',
37156:'gpp&e financialrecordingand reporting processes. the subgroups objectives did not include prescribing specific types of costs that should be included in',
37157:'the capitalized cost of an asset. a4. this proposed guidance was developed by the cai subgroup. the subgroup included industry',
37158:'representatives from several public accounting and consulting firms as well as representatives from the following federal agencies page 12 technical',
37159:'release 15 fasab handbook, version 20 06/21 technical release 15 department of defense dod including the individual military departments department',
37160:'of homeland security dhs federalaviationadministrationfaa generalservicesadministrationgsa nationalaeronauticsandspaceadministrationnasa national reconnaissance office nro office of the director of national intelligence odni united',
37161:'states bureau of reclamation usbr a5. thesubgroupdevelopedtheassetacquisitionlifecyclephases aalpdatacallfor the task force member agencies representatives to complete and submit to the',
37162:'subgroup for consolidation and discussion. the data call was designed to highlight the commonalities across the federal gpp&e acquisition process',
37163:'and to use those commonalities to outline a general acquisition decision framework to assist agencies with accounting for gpp&e costs',
37164:'in accordance with gaap. a6. thedatacall alsofocusedonidentifyingthecost activities thatoccur ineachaalp,the accounting treatments assigned to those activities, and the rationale for',
37165:'managements accounting policy that drives those cost accumulation and allocation determinations. managements ability to document and implement a reasonable and',
37166:'consistent approach is a critical component of supporting managements application of gaap. a7. in reaching its conclusions, the subgroup recognized',
37167:'the need to develop implementation guidance to address the complexities of allocating programmatic, managerial, and administrativecoststo gpp&e.thesubgroup felt that clarification',
37168:'of thisissueisespecially critical given the ongoing and significant efforts and resources that many federal entities such as the dod, dhs,',
37169:'and ic are expending to obtain and maintain unqualified audit opinions. there are a number of cost beneficial and reasonable',
37170:'changes e.g., policies, systems, and processes that federal entities can and should make in order to facilitate better financial management',
37171:'and reporting. however, entity management must be allowed to navigate within the parameters of gaap to determine the point at',
37172:'which the costs of improving or providing financial information outweigh the derived benefits. a8. the decision framework discussed in this',
37173:'technical release recognizes that the financial management information needs of stakeholders, both internal and external, vary by entity. the agencyspecific',
37174:'examples detailed inappendix b demonstrate how gpp&e cost accumulation methodologies may be tailored to different operating models and still be',
37175:'in accordance with gaap. the implementation guidance does not provide a onesized fits all solution, instead it is designed to',
37176:'give management a framework on which to base their stakeholder financial management information needs. the framework comprises the following three',
37177:'principles: page 13 technical release 15 fasab handbook, version 20 06/21 technical release 15 a. relevance/usefulness of information both to',
37178:'internal and external stakeholders; b. level of precision e.g., materiality needed to properly manage and report costs; and c. costbenefit',
37179:'of establishing and executing cost assignment processes, methods and tools. a9. one of the objectives of this technical release is',
37180:'to enable federal reporting entities to use a consistent framework to interpret existing guidance given the flexibility it provides. the',
37181:'proposalalsosupportstheobjectivesof ensuringthat1transactionsinvolvinggpp&eare recorded in accordance with federal accounting standards, and 2 the cost of producing federal financial information, as it',
37182:'relates to establishing the cost of gpp&e, does not outweigh the benefits derived by the users of the financial information.',
37183:'lastly, it provides a decision framework flowchart to assist entity management in applying the principles described throughout the technical release.',
37184:'responses to the proposal a10.theaapc received 15 response to the exposure draft from the following sources: table 1.0 types of',
37185:'respondents federal internal nonfederal external users, academics, others 2 auditors 0 2 preparers and financial managers 11 a11.theaapc considered responses',
37186:'to the exposure draft at its july 11, 2013, public meeting. theaapc did not relyon the number in favor of',
37187:'or opposed to a given position. information about the respondents majority view is provided only as a means of summarizing',
37188:'the comments. theaapc considered the arguments in each response and weighed the merits of the points raised. a12.of the 15',
37189:'responses, 14 supported the proposal. of the remaining 1, offered comments. page 14 technical release 15 fasab handbook, version 20',
37190:'06/21 technical release 15 aapc & boardapproval a13.the technical release was approved by theaapc for release to the fasab for',
37191:'issuance. the board has reviewed thistechnical release and a majorityof its members do not object to its issuance. written ballots',
37192:'are available for public inspection at the fasabs offices. page 15 technical release 15 fasab handbook, version 20 06/21 technical',
37193:'release 15 appendix b: illustrations the examplesinthisappendixare illustrative only; they do not represent authoritative guidance. these illustrations only depict a',
37194:'portion of the entities’ operations and the inclusion of an illustration in thistechnical release doesnot mean the acceptance of the',
37195:'entities’policies by the fasab or theaapc. illustrations assetacquisition lifecycle phases aalp b1. thesubgroupdefinedtheaalpstohighlightthecommonalities across thefederalpp&e acquisitionprocessandto use those commonalitiesto outline',
37196:'ageneralacquisition decision framework to assist agencies to account for gpp&e costs in accordance with gaap. note that theaalpand illustrationsreflect practicesasof',
37197:'thetechnical release date and are not updated for changes that may have occurred since. the five genericaalps are as follows:',
37198:'1 preliminary research and development r&d concept exploration, 2 intermediate r&d concept development, 3advanced r&d concept design and development, 4',
37199:'production asset development and inservice placement, and 5 operations and maintenance. table1belowlists thefivegenericaalps, for severaltaskforcemember agenciescorrespondingphases,the subgroupsaalpdescriptions, examples of activities',
37200:'that may indicate transition from oneaalp to another [phase indicators examples] and general accounting treatments that apply to activities in',
37201:'eachaalp. table 1: agency summary examples: asset acquisition lifecycle phases task force generic subgroupaapl member task force member agency phasetitles',
37202:'agency titles used phase 1: preliminary r&d dod material solution analysis concept exploration faa mission analysis phase gsa identification phase',
37203:'nasa preformulation concept studies nro concept studies phase 1 indicators examples: concept, feasibility, and trade studies. phase 1 general accounting',
37204:'treatment: expensed in the period incurred. generic subgroup aalpdescriptions decision r&d activities directed at an identifiable current or emerging resource',
37205:'requirements. page 16 technical release 15 fasab handbook, version 20 06/21 technical release 15 task force generic subgroupaapl member taskforcememberagencyphase',
37206:'genericsubgroupaalp titles agency titles used descriptions phase 2: dod technology development targeted r&d activities that intermediater&d concept buildupon thepriorphases development',
37207:'decision r&d activities and are directed at an identifiable current or emerging resource requirements. faa investmentanalysis phase gsa preaward phase',
37208:'nasa formulation preliminary design and technical completion nro concept development phase 2 indicators examples: investment analysis and review of alternatives.',
37209:'phase 2 generalaccounting treatment: expensed in the period incurred. phase 3: dod engineering and manufacturing r&d closeout and the advancedr&d',
37210:'concept development genesisofassetdevelopment design and development activities. faa solution development gsa award nasa formulation preliminary design and technical completion nro',
37211:'preliminary design phase 3 indicators examples: source selection decision and approval for final investment analysis phase 3 generalaccounting treatment: mixture',
37212:'of costs that are expensed in the period incurred and those that are capitalized and depreciated or amortized over the',
37213:'useful life of the asset. phase 4: dod production & deployment p&d fullyengaged asset production asset development activities. faa solution',
37214:'implementation development and in service placement gsa postaward nasa implementation final design, fabrication,assembly, integration & test, launch nro build phase',
37215:'4 indicators examples: initiate asset development or acquisition. phase 4 generalaccounting treatment: capitalized and depreciated or amortized over the useful',
37216:'life of the asset. phase 5: operations and dod operations & support activities aimed at maintenance faa inservice management maintaining',
37217:'the operability of the entitys assets. gsa operation and maintenance nasa implementation operation and sustainment nro operations phase 5 indicators',
37218:'examples:asset is placed in service. phase 5 generalaccountingtreatment: expensed in the period incurred excluding costs incurred to extend the useful',
37219:'life, enhance existing capabilities, or add new capabilities to the asset. page 17 technical release 15 fasab handbook, version 20',
37220:'06/21 technical release 15 agency specific examples:assetacquisition lifecycle phases b2. agiven entity may consider certaincosts,such as theagencyheadsoffice,tobeperiod costs because the',
37221:'activities contribute to the entitys strategic objectives and mission rather than the acquisition of a particular asset. in contrast, another',
37222:'entity may have an operationalorbusinessneedtoallocate thesametypeofcoststoindividualassetsbecause suchcostsareincurredinsupportofacquiringthoseassets. examplesfromthefaa,gsa, and the nro are included in this technical release to demonstrate how',
37223:'an entitys operatingmodelmayaffecthowmanagementidentifiesandrecordscertainprogramcosts.5 the gsas operating model requires more granular cost accumulation policies that allocate costs across the many individual',
37224:'assets it is responsible for acquiring. as shown in the following tables, this business need does not exist for the',
37225:'faaor the nro, where the mission is not primarily asset acquisition. b3. thefaasmissionincludes themodernizationandimprovement ofthenationalairspace system nas and research, engineering',
37226:'& development re&d activities to improve the safety and effectiveness of the air traffic control system. to support its mission',
37227:'the faa incurs direct burden base and indirect burden pool costs. the faahas developed a burdening process by which management',
37228:'allocates indirect costs to various projects. for example, the faapools indirect technical support services contract tssc and systems engineering and',
37229:'technical assistance seta costs and uses its burdening process to allocate those costs to capital projects. b4. asignificantpartofthe gsasmission istoserveas',
37230:'asupplier ofgoodsand servicesto federal agencies onareimbursablebasis. in this role,thegsahasabusiness needto capture costs including overhead and indirect costs at a very',
37231:'granular level. this permits the gsato establish rates and develop pricing models that will recoup the full cost of operating',
37232:'under a nonappropriated, userfee model. the difference in operational requirements results in gsas personal property capitalization threshold of $10,000, which',
37233:'is lower than faaand the nro thresholds of $100,000. the gsas personal property capitalization threshold is reflective of the types',
37234:'and quantities of property acquired by the gsa. this is an example of managements role in establishing internal policies and',
37235:'proceduresthatfit within theparametersoutlined ingaapandalignto the entitysoperating model. b5. the nros gpp&e cost accumulation and allocation policies and procedures allow the',
37236:'agency to meet the intelligence needs of the intelligence community ic, department of 5sffac 1 paragraph 164 states, comparability implies',
37237:'that differences among financial reports should be caused by substantive differences in the underlying transactions or organizations rather than by',
37238:'the mere selection of different alternatives in accounting procedures or practices. page 18 technical release 15 fasab handbook, version 20',
37239:'06/21 technical release 15 defense, department of homeland security, and users of intelligence products. unlike the gsa, the nro does',
37240:'not operate on a feeforservice or reimbursable basis. the nro utilizes costplus contractual agreements, which allows them to procure large',
37241:'scale satellite assets, as well as a wide range of professional and technical services that cross multiple pp&e assets and',
37242:'lifecycle phases. this acquisition and funding model contributes to an operating environment which results in a different decision point at',
37243:'which the benefits of achieving more precise cost allocation information are outweighed by the cost to obtain that information. b6.',
37244:'thegsahas abusinessneedtoaccumulate and allocatedetailedcostinformationto ensure that their pricing models, rates and schedules facilitate the full recovery of costs under a',
37245:'nonappropriated, userfee model. for gsas real property construction and alterationprojects,thecost objectisagpp&easset. in contrast, for thefaaandthe nro, the end program objective',
37246:'is enhanced information to meet a mission need. each of these agenciesutilizestheirrespectiveoperatingmodelasacomponentin thedevelopment andexecutionoftheiraccountingpoliciesandprocedures. thegpp&ecostaccumulation policies and procedures of the',
37247:'faaand the nro are primarily related to their respective aerospace services and satellitedriven intelligence missions. the operating environments of these',
37248:'agencies are supported by low volume and high dollarvalue gpp&e acquisitions. consequently, these agencies have differing precision points at which',
37249:'accumulating and assigning costs to gpp&e assets at a more granular level is ineffective and inefficient. b7. the following examples',
37250:'describe the primary differences between these three agencies: i. when a project meeting the capitalization threshold is deemed probable and',
37251:'feasible, the gsa will classify certain feasibility costs as eligible for capitalization. at the same time, the faa and the',
37252:'nro consider these costs to be period expenses. ii. the gsacapitalizes direct labor cost and various types of allocable indirect',
37253:'labor costs associated with its capital projects. the faa pools indirect tssc and setacosts and uses its burdening process to',
37254:'allocate those costs to capital projects. iii. the nro applies an allocation methodology to costs that are determined to be',
37255:'acquisition management costs amcs. amcs include comingled government program management costs; costs associated with integration and support services provided on',
37256:'seta, federally funded research and development centers ffrdc and contractor assistance andadvisory service caas contracts; directoratelevel office support costs; and',
37257:'agencylevel general and administrative costs. nros cost accounting system and processes do not facilitate direct tracing of amcs and there',
37258:'is no inherent business or mission need to implement a system or reengineer processes that would do so. the nros',
37259:'allocation methodology capitalizes a portion of these amcs to individual gpp&e assets. page 19 technical release 15 fasab handbook, version',
37260:'20 06/21 technical release 15 b8. tables 24 provide a summarylevel view of the gsas, the faas, and the nros',
37261:'pp&e acquisition lifecycle cost accounting policies and procedures. table 2: general servicesadministration recognition basis per entity internal phase activity recognition',
37262:'accounting policies 1 2 administrative costs direct of developing & fielding a system design reviews e.g., formal qualification reviews, preliminaryand',
37263:'critical design reviews: a. before technical feasibility has been determined. b. after technical feasibility has been determined caa. b. pitalize',
37264:'preacquisition costs. costs incurred prior to the formal project phase such as costs of feasibilitystudies, environmental studies, zoning expense and',
37265:'traffic studies, appraisals, surveys, and capitalize various planning and design costs may be capitalized if acquisition or approval of the',
37266:'project is probable and the costs can be directly identified to the project. if at a later date the project',
37267:'is canceled, then the previously capitalized costs are expensed. 3 4 labor costs during construction this includes the gsas personnel',
37268:'and contract direct labor costs as well as indirect costs allocated to capital projects. project management costs baseline and contractor',
37269:'administration cacapitalize capitalized projects. gsas real property policy capitalizes projects that acquire land and/or construct new buildings and structures; improve',
37270:'land; or extend the useful life of buildingsandtheir systems; or replace, enhance or upgrade a substantial portion of an asset',
37271:'with pitalize additional functionality or capacity. for a project to be capitalized, it must: 1 have a cost of $50,000',
37272:'or greater; 2 have a useful life of 2 years or more. 5 general maintenance expense the gsaconsiders the costs',
37273:'incurred in this phase inherently an expense. table 3: federalaviationadministration phase example cost activities recognition recognition basis per entity internalaccounting',
37274:'policies 1 research & development costs: mission analysis identify projected demand for services identify technological opportunities mission needs analysis and',
37275:'assessment initial requirements definition expense the faabelieves that the costs incurred in this phase are inherently expense. page 20 technical',
37276:'release 15 fasab handbook, version 20 06/21 technical release 15 recognition basis per entity internal phase examplecostactivities recognition accountingpolicies research&',
37277:'development costs: expense thefaaexpenses allprototypecosts incurred investmentanalysis beforetechnologicalfeasibilityhas been initial investment decision established except for operational feasibility final investment decision',
37278:'prototypes that will be used in operations if successful solution development comingled program management i.e., expense system engineering and capitalize',
37279:'hardware/software design physicalairspace phys/airsp infrastructure test and evaluation data/documentation at the completion of a final investment decision the faamakes the',
37280:'decision to acquire develop or purchase a gpp&e asset. based on guidance from the faafinancial manual certain costs will be',
37281:'capitalized and certaincosts will be expensed.all qualifying costs necessary to acquire a capital asset, or improve on an existing capital',
37282:'asset, are classified as capital costs. the purchase price and costs incurred to bringan asset to aform and location suitablefor',
37283:'its intended use are examples of capital costs. costs that do not meet these criteria are expensed. the faaexpenses all',
37284:'costs incurred on a first prototype before technological feasibility has been established. after technological feasibility has been established, the subsequent',
37285:'costs of constructing and installing a first prototype are eligible for capitalization. 4 implementation program management engineering environmental/osha site selection',
37286:'comingled i.e., expense and capitalize see above phase 3. construction install and checkout commissioning/close telecommunication training 5 inservice management program',
37287:'support second level engineering expense at the completion of a joint acceptance inspection the asset is in a form and',
37288:'location suitable for its intended use. the faabelieves that the costs incurred in this phase are inherently expense. page 21',
37289:'technical release 15 fasab handbook, version 20 06/21 technical release 15 table 4: national reconnaissance office phase 1 2 3',
37290:'activity directorate level research and development leading to the initial decision point i.e., key decision point a6 costs related to',
37291:'the proposal review and contract award processes at key decision point b the director of the nro signs a decision',
37292:'memorandum requirement and specification development labor costs during construction recognition expense expense capitalize recognition basis per entity internalaccounting policies basic,applied,andadvancedr&dcosts',
37293:'incurred prior to the secondary decision point i.e., key decision point b are expensed. basic,applied,andadvancedr&dcosts incurred prior to key decision',
37294:'point b are expensed. key decision point b triggers the capitalization of costs for development. amcs related to the program',
37295:'acquisition strategy management processes. these costs include: 1. government program management costs, 2. integration and support contracts for seta, ffrdc,',
37296:'and caas, 3. directorate level office support, agency general and administrative costs comingled expense and capitalize the nro uses an',
37297:'allocation methodology by whichacquisition management costs amc incurred throughout the entire acquisition lifecycle excluding the operations and maintenancephase are bucketed',
37298:'and allocated to capital and expense accounts based on the proportional percentage of actual, nonamc capital and expense expenditures incurred',
37299:'throughout the year. 4 costs related to final design, build, test, and delivery activities capitalize development costs continue to be',
37300:'capitalized in this phase. project management costs baseline and contractor administration amcs related to the government program management processes comingled',
37301:'expense and capitalize seeamc explanation in above phase 3. 5 operations and maintenance o&m expense initial operating capability ioc triggers',
37302:'the expense of costs for operations and maintenance. 6 keydecisionpointskdparedefinedsignificantmilestonesinthenationalsecurityspaceprogramofthedepartmentofdefense acquisition lifecycle. for example, kdp b is the official program',
37303:'initiation of a national security space program of the department of defense, which triggers a formal review to determine maturity',
37304:'of technology and the programs readiness to begin the preliminary system design. page 22 technical release 15 fasab handbook, version',
37305:'20 06/21 technical release 15 appendix c: decision framework flowchart c1. as stated throughout this technical release, management should base',
37306:'their financial management information needs on the following three principles: a. relevance/usefulness of information both to internal and external stakeholders;',
37307:'b. level of precision e.g., materiality needed to properly manage and report costs; and c. cost benefit of establishing and',
37308:'executing cost assignment processes, methods and tools. c2. the decision framework flowchart provides users with an organized approach for applying',
37309:'the principles described above to support their process of developing entity specific policies and practices for accumulating, allocating, and reporting',
37310:'the cost of gpp&e in compliance with relevant accounting standards. page 23 technical release 15 fasab handbook, version 20 06/21',
37311:'technical release 15 page 24 technical release 15 fasab handbook, version 20 06/21 technical release 15 appendix d:accounting literature recognition',
37312:'d1. sffas 6 accounting for property, plant, and equipment, paragraph 26 provides the examples below as cost activities that reporting',
37313:'entities may incur in order to bring pp&e to a form and location suitable for its intended use. for example,',
37314:'the cost of acquiring property, plant, and equipment may include: amounts paid to vendors; transportation charges to the point of',
37315:'initial use; handling and storage costs; labor and other direct or indirect production costs for assets produced or constructed; engineering,',
37316:'architectural, and other outside services for designs, plans, specifications, and surveys; acquisition and preparation costs of buildings and other facilities;',
37317:'an appropriate share of the cost of the equipment and facilities used in construction work; fixed equipment and related installation',
37318:'costs required for activities in a building or facility; direct costs of inspection, supervision, and administration of construction contracts and',
37319:'construction work; legal and recording fees and damage claims; fair value of facilities and equipment donated to the government; and',
37320:'material amounts of interest costs paid. the costassignment andallocation decision framework d2. officeofmanagementandbudgetombcirculara136, financial reporting requirements: statement of net cost',
37321:'snc introduces the following components of the cost accumulation and allocation decision framework: a. costs that cannot be assigned to',
37322:'specific programs or outputs section ii.4.4, statement of net cost, the components of net cost subparagraph states that: the statement',
37323:'should include a presentation of the following: 1 program costs, 2 related exchange revenues, 3 the excess of costs over',
37324:'exchange revenues net program costs, 4 gain/loss on pension, orb, or opeb assumption changes, 5 the page 25 technical release',
37325:'15 fasab handbook, version 20 06/21 technical release 15 costs that cannot be assigned to specific programs or outputs, and',
37326:'6 the exchange revenues that cannot be attributed to specific programs and outputs. b. program level versus output level cost',
37327:'allocation section ii.4.4.3 gross program costs states that: the reporting entity should report the full cost of each programs output,',
37328:'which consists of a both direct and indirect costs of the output, and b the costs of identifiable supporting services',
37329:'provided by other segments within the reporting entity and by other reporting entities. the reporting entity should accumulate andassign costsinaccordancewith',
37330:'thecosting methodologyin sffas no.4. program costs should also include any nonproduction costs that can be assigned to the program but',
37331:'not to its outputs. c. costs not assigned to programs sectionii.4.4.7 costsnotassigned to programs states that:areporting entity and its suborganizations',
37332:'may incur: a highlevel general management and administrative support costs that cannot be directly traced, assigned on a causeandeffect basis,',
37333:'or reasonably allocated to segments and their outputs and b nonproduction costs that cannot be assigned to a particular program.',
37334:'these costs are part of the entity and suborganization costs and should be reported on the snc as costs not',
37335:'assigned to programs. managements role inapplying the costaccumulation,assignment, and allocation decision framework d3. sffas 4 managerial cost accounting standards and',
37336:'concepts7 introduces the following components of the cost allocation decision framework: a. appropriate and consistent cost accumulation, assignment, and allocation',
37337:'costs of resources consumed by responsibility segments should be accumulated by type of resource. outputs produced byresponsibilitysegmentsshould be accumulated and,',
37338:'if practicable, measured in units. the full costs of resources that directly or indirectly contribute to the production of outputsshould',
37339:'be assigned to outputs through costing methodologies or cost finding techniques that are most appropriate to the segments operating environment',
37340:'and should be followed consistently. the cost assignments should be performed using the following methods listed in the order of',
37341:'preference: a directly tracing costs wherever feasible and economically practicable, bassigning costson a causeand effect basis, or callocating costson a',
37342:'reasonable and consistent basis. 7sffas 4 text box above paragraph 116. page 26 technical release 15 fasab handbook, version 20',
37343:'06/21 technical release 15 b. factors for managements consideration each reporting entity should determine the appropriate detail for its cost',
37344:'accounting processes and procedures based on several factors. these include the: nature of the entitys operations; precision desired and needed',
37345:'in cost information; practicality of data collection and processing; availability of electronic data handling facilities; cost of installing, operating, and',
37346:'maintaining the cost accounting processes; and any specific information needs of management. page 27 technical release 15 fasab handbook, version',
37347:'20 06/21 technical release 15 appendix e:abbreviations aalp assetacquisition lifecyclephases aapc accountingandauditingpolicycommittee amc acquisition management costs asid accounting system identification',
37348:'caas contractorassistanceandadvisoryservice cai costaccountingissues dhs department of homeland security dod department of defense faa federalaviationadministration fasab federalaccountingstandardsadvisoryboard ffrdc federally funded',
37349:'research and development centers gaap generallyacceptedaccountingprinciples gpp&e general property, plant, and equipment gsa generalservicesadministration ic intelligence community kdp key decision',
37350:'point nas nationalairspacesystem nasa nationalaeronauticsandspaceadministration nro national reconnaissance office o&m operations and maintenance odni office of the director of national',
37351:'intelligence omb office of management and budget opeb other postemployment benefits orb other retirement benefits osha occupationalsafetyandhealthadministration pbs public buildings',
37352:'service phys/airsp physicalairspace pp&e property, plant, and equipment re&d research, engineering & development r&d research and development seta systems engineeringandtechnicalassistance',
37353:'sffac statementoffederalfinancialaccountingconcepts sffas statementoffederalfinancialaccountingstandards snc statement of net costs tssc technical support services contract tr technical release usbr united states',
37354:'bureau of reclamation page 28 technical release 15 fasab handbook, version 20 06/21 technical release 16: implementation guidance for internal',
37355:'use software status issued january 19, 2016 effective date effective upon issuance affects rescinds technical release 5. affected by technical',
37356:'release 17. summary this technical release tr assists reporting entities in implementing statement of federal financialaccounting standards sffas 10, accounting',
37357:'for internal use software. since fasab issued sffas 10 in 1998, software development practices have changed dramatically and reporting entities',
37358:'have experienced challenges applying the standards given the new terminology and techniques that have evolved. the tr provides implementation guidance',
37359:'regarding: a. the definition of ius, component/module based ius assets, software development practices including approaches that involve phases, and clarifying',
37360:'ius recognition, measurement, and disclosure items such as capitalized cost, capitalization cut off, capitalization threshold, enhancement, impairment, and related matters;',
37361:'b. new ius challenges brought by changes in ius development practices since the issuance of sffas 10; and c. managements',
37362:'role in applying sffas 10. this objective of this guidance is to explain how to apply existing standards to the',
37363:'fast changing internal use software ius environment and help ensure that: a. transactions involving ius are recorded in accordance with',
37364:'federal accounting standards. b. the cost of producing federal financial information, as it relates to capitalization or expense of ius',
37365:'cost, does not outweigh the benefits derived by the users of the financial information. page 1 technical release 16 fasab',
37366:'handbook, version 20 06/21 technical release 16 table of contents page summary 1 introduction 3 technical guidance 6 appendixa:basis for',
37367:'conclusions 15 appendix b: illustrations 19 appendix c:abbreviations 27 page 2 technical release 16 fasab handbook, version 20 06/21 technical',
37368:'release 16 introduction purpose 1. thistechnicalreleasetrassistsagenciesinapplyingsffas10, accounting for internal use software, to the new software development practices that have evolved',
37369:'since fasab issued the standard in october 1998. the tr considers the software development terms andpracticesthat reporting entitiesutilize currentlyand helps',
37370:'clarifythestandardsinlight of those terms and practices. specifically, the tr provides guidance regarding: a. the definition of internal use software ius,',
37371:'component/module based ius assets, software development practices including approaches that involve phases, and clarifying ius recognition, measurement, and disclosure items',
37372:'such as capitalized cost, capitalization cut off, capitalization threshold, enhancement, impairment, and related matters; b. new ius challenges brought by',
37373:'changes in ius development practices since the issuance of sffas 10; and c. managements role in applying sffas 10. 2.',
37374:'this tr introduces new terms used in current development practices and defines them in light of the application of this',
37375:'guidance. it provides a discussion of issues and examples to assist entity management in applying the principles described throughout the',
37376:'tr. the examples were selected because they were derived from underlying transactions or organizational characteristics rather than being attributable to',
37377:'preferences. 3. the accounting standards and related basis for conclusions consistently recognize managements role in interpreting and applying generally accepted',
37378:'accounting principles gaap within its operational environment. this tr recognizes that management is responsible for establishing ius accounting policies, methodologies,',
37379:'and for maintaining adequate documentation on the sources of data. it also recognizes that the cost of producing federal financial',
37380:'information, asit relatesto capitalization or expense of ius cost, should not outweigh the benefits derived by the users of the',
37381:'financial information. background 4. thesoftwaredevelopmentlifecyclehasdramaticallychangedsincetheissuanceofsffas 10in1998. atthattimethelinear/waterfall1 softwaredevelopmentpracticeswereprevalent 1 the waterfall model is a sequential design process, used in software',
37382:'development processes, in which progress is seen as flowing steadily downwards like a waterfall through the software development phases. page',
37383:'3 technical release 16 fasab handbook, version 20 06/21 technical release 16 and characterized by three distinct lifecycle phases and',
37384:'long development cycles. given the changes in development practices, technological advances, and significant new development techniques and architectures,2 guidance for',
37385:'implementation and sustainment of sffas 10 became critical. 5. thistrintroducesnewiusdevelopmenttermsanddefinesthemtoaidinapplyingexisting standards. the definitions provided are not all encompassing but are',
37386:'included to promote greater understanding, and more consistent application and implementation of the standards. the same principles used to develop',
37387:'the guidance on the current ius development practices could be used for future ius development practices. the business events and',
37388:'deliverables table and agency practice examples are provided inappendix b. these examples are intended to illustrate use of professional judgment',
37389:'in the development and application of policy and practices to account for ius in accordance with gaap. the examples are',
37390:'not all encompassing and reporting entities may identify other more useful and relevant methodologies. users of this guidance should use',
37391:'these examples to develop their own reasonable business processes. 6. this tr was developed to aid in meeting the operating',
37392:'performance reporting objective identified in statement of federal financialaccounting concepts sffac 1, objectives of federal financial reporting,paragraph 143 :federalfinancial reporting',
37393:'should assistreport users in evaluating the service efforts, costs, and accomplishments of the reporting entity; the manner in which these',
37394:'efforts and accomplishments have been financed; and the management of the entitys assets and liabilities. federal financial reporting should provide',
37395:'information that helps the reader to determine: a. the costs of providing specific programs and activities and the compositions of,',
37396:'and changes in, these costs; b. the efforts and accomplishments associated with federal programs and the changes over time and',
37397:'in relation to costs; and c. the efficiency and effectiveness of the governments management of its assets and liabilities. 7.',
37398:'paragraph 7 was rescinded by technical release 17. 2 such as cloud service, shared service, agile development, and spiral development',
37399:'with a focus on module based development and shorter development cycles. 3this principle was also relied upon in office of',
37400:'management and budget omb circulara11 preparation, submission, and execution of the budget; supplement tocirculara11, capital programming guide july 2014, page',
37401:'61. page 4 technical release 16 fasab handbook, version 20 06/21 technical release 16 technical guidance scope 8. readers of',
37402:'this technical release tr should first refer to the hierarchy of accounting standards in statement of federal financialaccounting standards sffas',
37403:'34, the hierarchy of generally accepted accounting principles, including the application of standards issued by the financial accounting standards board.',
37404:'this tr supplements the relevantaccounting standards,but isnota substituteforanddoesnottakeprecedenceover thestandards. thistrclarifiesbut doesnot changeguidanceprovided insffas4, 5, 6as amended, and 10. 9. this',
37405:'tr rescinds tr5 implementation guidance on statement of federal financial accounting standards 10: accounting for internal use software. 10. this',
37406:'tr applies to all internal use software that meet the definition of ius as described in sffas 10 including the',
37407:'following: a. software to be used in research and development where the software will have an alternate future use b.',
37408:'softwaredevelopedseparatelyandinstalledonanumberofdifferentgeneralproperty, plant, and equipment pp&e assets at different times4 applying existing standards to current development models 11. ius definition: sffas',
37409:'10, paragraphs 8 9, defines internal use software as software that is purchased from commercial vendors offtheshelf cots, internally developed,',
37410:'or contractordeveloped solely to meet the entitys internal or operational needs. the ius development or modification can be performed by',
37411:'employees of the entity or contractors that the entity ispaying to design, program, install, and implement. software assets need to',
37412:'be evaluated for ownership to determine which entity is ultimately responsible for reporting the asset. 4sffas 10, paragraph 22, provides',
37413:'that computer software that is integrated into and necessary to operate general pp&e, rather than perform an application, should be',
37414:'considered part of the pp&e of which it is an integral part and capitalizedanddepreciatedaccordingly. however,computersoftwarecouldbedeveloped separatelyandinstalledon several general pp&e assets',
37415:'at different times. for example, antiballistic missile software installed on multiple radar systems at different times can be treated as',
37416:'a separate ius asset if the software meets the capitalization threshold. page 5 technical release 16 fasab handbook, version 20',
37417:'06/21 technical release 16 12. development phases: sffas 10 presents three phases of software development that follow a linear approach',
37418:'to an ius project: the preliminary design phase, the software development phase, and the postimplementation/operational phase. it states that costs',
37419:'incurred during the development phase should be capitalized, while the costs incurred in other phases should be expensed. however, software',
37420:'may not always be developed under this linear approach and capitalization decisions absent distinct phases are more difficult. regardless of',
37421:'timing, the cost incurred for development phase activities should be capitalizedorexpensed based onprovisions of sffas10 and considering thesubstanceof the activity.',
37422:'13. capitalized cost: the full cost direct and indirect cost as stated in sffas 4, paragraph 89, 90,and 91incurredduringthesoftwaredevelopment phasesshouldbecapitalized',
37423:'sffas 10, paragraph 16 thru 18. considering economic feasibility, a cost estimation technique could be developed to trace the costs',
37424:'to outputs based on the sffas 4, paragraph 124, provision that [in] principle, costs should be assigned to outputs in',
37425:'one of the methods listed below in the order of preference: a. directly tracing costs wherever economically feasible; b. assigning',
37426:'costs on a causeandeffect basis; and c. allocating costs on a reasonable and consistent basis. 14. aspecific software developmentprojectmayincludeexpendituresfor improvements',
37427:'and maintenance that cannot be easily separated but may be reasonably and consistently allocated. one approach that can be used',
37428:'is a ratio based on the projected work hours for development phase activities relative to other types of work. such',
37429:'a ratio can be applied to determine the expenditures that should be capitalized. the basis for allocating costs should be',
37430:'consistent with applicable standards and defensible. 15. capitalization cut off: sffas 10, paragraph 20, states, costs incurred after final acceptance',
37431:'testing has been successfully completed should be expensed. where the software is to be installed at multiple sites, capitalization should',
37432:'cease at each site after testing is complete at that site. in some development practices, each iteration5 within an iusdevelopment',
37433:'hasitsown acceptance testing before moving forward to the next iteration and final acceptance testing may not always be performed. the',
37434:'entity should identify a predetermined agency milestone such as the golive or inservice date which is equivalent to a final',
37435:'acceptance test for capitalization cut off purposes. 5 iteration is the act of repeating a process with the aim of',
37436:'approaching a desired goal, target or result. each repetition of the process is also called an iteration, and the results',
37437:'of one iteration are used as the starting point for the next iteration. page 6 technical release 16 fasab handbook,',
37438:'version 20 06/21 technical release 16 16. integrated software: sffas 10, paragraph 22, states, computer software that is integrated into',
37439:'and necessary to operate general pp&e, rather than perform an application, should be considered part of the pp&e of which',
37440:'it is an integral part and capitalized and depreciated accordingly e.g., airport radar and computeroperated lathes. the aggregate cost of',
37441:'the hardware and software should be used to determine whether to capitalize or expense the costs. in situations where software',
37442:'and the hardware on which it runs have independent service lives, the determination of the useful life of the software',
37443:'should be viewed independently of the useful life of the hardware. this determination should be made on a case by',
37444:'case basis for each entity and is at the discretion of management of the entity. the rationale for this determination',
37445:'should be documented. 17. component based iusasset: sffas 10, paragraph 33, states, for each module or componentof asoftwareproject,amortizationshouldbeginwhenthat moduleorcomponent hasbeensuccessfullytested.',
37446:'iftheuseofamoduleisdependentoncompletionofanother modules, the amortization of that module should begin when both that module and the other modules have successfully completed',
37447:'testing. for example, an entity may develop an accounting software system containing three modules: a general ledger, an accounts payable',
37448:'subledger, and an accounts receivable subledger. in this example, each module couldbeanalyzedtodetermine whetheritcould betreated asa separate asset. specifically, if the',
37449:'module provides economic benefit through distinct, substantive functionality; and meets the tests for capitalization threshold, ownership, and eligibility for capital',
37450:'treatment, then the module could be treated as a separate ius asset for the purposes of recognition, measurement including amortization,',
37451:'and disclosure in accordance with sffas 10. 18. capitalization threshold: sffas 10, paragraph 24, states, each federal entity should establish',
37452:'its own threshold as well as guidance on applying the threshold to bulk purchases of software programs e.g., spreadsheets, wordprocessing',
37453:'programs, etc. and to modules or components of a total software system. when establishing the capitalization threshold for ius, the',
37454:'federal entity should include both qualitative and quantitative considerations as stated in sffac 2 paragraph 46. qualitative considerations could be',
37455:'applied to ius assets that require special management attention because of their importance to the agency mission; high development, operating,',
37456:'or maintenance costs; high risk; high return; or their significant role in the administration of agency programs, finances, property, or',
37457:'other resources. 6 19. when establishing a capitalization threshold for bulk software purchases, the threshold should not be based on',
37458:'unit price. the organization should consider the bulk value and 6omb circulara11 preparation, submission, and execution of the budget; supplement',
37459:'to circular a11, capital programming guide, threshold for capital programming, page 2, july 2014. page 7 technical release 16 fasab',
37460:'handbook, version 20 06/21 technical release 16 useful life established by the organization to avoid materially distorting period costs and',
37461:'understating asset values. 20. omb notes that a stratified capital programming process involving more or less detail and review based',
37462:'on the size or strategic importance of proposed investments may be appropriate,particularlyinlargeagencies. 7similarly,morethanonecapitalizationthreshold could be established for different components of',
37463:'a large agency.agencies should have well documented thresholds clearly disseminated and implemented across the organization. 21. enhancement: sffas 10, paragraph',
37464:'25, states, the acquisition cost of enhancements to existing internal use software and modules thereof should be capitalized when it',
37465:'is more likelythannotthattheywillresultinsignificantadditionalcapabilities. significantadditional capabilities are modifications to existing ius that result in additional functionalitythat is, modifications to enable the',
37466:'software to perform tasks that it was previously incapable of performing.as stated in sffas 10 paragraph 26, capitalizable enhancements normally',
37467:'require new software specifications and may also require a change to all or part of the existing software specifications. examples',
37468:'of enhancements could include augmenting existing business functions with new features and functions, developing additional new business functions, and/or adding',
37469:'new functionality and capability. 22. if one module is dependent upon another to function, then those modules should be evaluated',
37470:'together as one enhancement. all costs of an enhancement, including any costs carried over or allocated from the original software,',
37471:'should be amortized over the enhancements estimated useful life. 23. impairment: sffas 10, paragraphs 2830, addresses how to determine if',
37472:'software is impaired during the postimplementation operational phases and the measurement of the impairment for the impaired software remaining in',
37473:'use or to be removed. significant events or changes in operating circumstances warrant a review to determine whether the carrying',
37474:'value of an existing software asset is not recoverable and should be impaired. an assessment should be performed to determine',
37475:'the remaining useful life of the impaired software for amortization purposes. 24. when it is more likely than not that',
37476:'a developmental software project will not be completed, no further costs should be capitalized and any costs that have been',
37477:'capitalized should be writtenoffin accordancewithsffas10,paragraph 31. indicationsthat thesoftwaremayno longer be completed include: a. the expenditures are neither budgeted nor incurred',
37478:'to fund further development; 7see note 6. page 8 technical release 16 fasab handbook, version 20 06/21 technical release 16',
37479:'b. the discontinuance of the business segment the software was designed for; c. the inability to resolve programming difficulties timely;',
37480:'or d. adecisiontoobtaincotsinsteadandabandonthecurrentsoftwaredevelopment 25. whenadevelopmentalsoftwareprojectissuspendedpendingmanagementsevaluationas to whether to resume or terminate the project, the software development cost may remain capitalizedaslongasitismorelikelythannot',
37481:'8 thatthedevelopmentalsoftwareprojectwill eventually be completed and the cost incurred or expected to be incurred meets the capitalization threshold. the statusof',
37482:'the project should be reevaluated periodically and the capitalized cost should be written off if management concludes that it is',
37483:'more likely than not that the software will not be placed into service in the future. 26. software license: if',
37484:'the term of software licenses is 2 years or more with periodic payments, the license should be evaluated against lease',
37485:'criteria as stated in sffas 5 paragraphs 4346 and sffas 6 paragraph 20 to determine if it is a capital',
37486:'or operating lease. if the licenses is perpetual with an upfront cost9 to use the software for its entire lifetime,',
37487:'then the entity is purchasing ius and should apply its existing policy for capitalization thresholds to determine if the license',
37488:'should be capitalized or expensed. 27. alicenseagreementmayincludeexecutorycosts for maintenanceandtechnical support. agency judgment should apply in determining what portions of license',
37489:'fees are attributable to softwarecapitalizablecostsversusexecutorycosts.assuming leasecapitalizationcriteria and thresholds are met, software license capitalization amounts10 may be derived from the payment',
37490:'schedule contained in the license agreement. as stated in sffas 5, if the portion of the minimum lease payments representing',
37491:'executory cost is not determinable from the lease provisions, the amount should be estimated. agencies may also want to consider',
37492:'having each license agreement specifically identify the various costs throughout the license lifecycle, for example, initial license, maintenance, and enhancement.',
37493:'8sffas10, paragraph 31, provides for write off if it is more likely than not that the project will not be',
37494:'completed and placed in service. 9the cost could be charged as a onetime payment or financed over a set period',
37495:'of time. 10sffas 5, paragraph 44. page 9 technical release 16 fasab handbook, version 20 06/21 technical release 16 guidance',
37496:'onapplying sffas 10 to certain new ius developments cloud computing 28. acloud computing serviceis aresourceprovidedover theinternetthathas thefollowing essential characteristics: ondemand',
37497:'selfservice, broad network access, resource pooling, rapid elasticity, and measured service. the most common cloud service resources are: software as',
37498:'a service, platform as a service, and infrastructure as a service.11 29. ifacloudcomputingarrangementincludesasoftwarelicense,thecustomershouldaccount for the software license element of the',
37499:'arrangement consistent with the acquisition of other software licensesin accordance withthe lease criteria stated in sffas 5 andsffas 6, and',
37500:'as discussed in paragraph 26 of thistr. sffas 10 is not applicable to a cloud computing arrangement that does not',
37501:'convey a contractual right to the ius or to ones that do not include an ius license. the entity that',
37502:'develops and owns the software, platform, or infrastructure that is used in the cloud computing arrangement would account for the',
37503:'software development in accordance with sffas 10. if the funding to develop cloud computing is shared among entities without clear',
37504:'ownership, the service provider entity that receives funding and is responsible for maintaining the software, platform, or infrastructure should account',
37505:'for the software in accordance with sffas 10 and the full cost/interentity cost requirements of sffas 4. shared services 30.',
37506:'shared service means a mission or support function provided by one business unit to other businessunitswithin orbetween organizations. thefunding and',
37507:'resourcing of the serviceis shared and the providing entity effectively becomes an internal/external service provider. there are three types of',
37508:'shared service structures in the federal government: intraagency, interagencyandcommercial. intraagencysharedservicesincludethoseprovidedwithinthe boundaries of a specific organization such as a federal department',
37509:'or agency, to that organizations internal units. interagency shared services are those provided byone federal oproviders organizational boundaries. commercial shared',
37510:'services are those provided by private vendors.12 11the full definition is available at the national institute of standards andtechnology: the',
37511:'nist definition of cloud computing, special publication 800145, september 2011. 12chief information office council: federal shared service implementation guide, april',
37512:'2013, and omb m1308: improving financial systems through shared services, march 25, 2013. page 10 technical release 16 fasab handbook,',
37513:'version 20 06/21 technical release 16 31. for intraagency shared services, a cost allocation methodology could be developed in accordance',
37514:'with sffas 4, paragraphs 120125. for interagency shared services and commercial shared services, the service provider entity that owns receives',
37515:'funding/responsible for maintaining the software should account for the software in accordance with sffas 10. in the event that the',
37516:'entity receiving the service the customer has the contractual right to take possession of the software at any time during',
37517:'the hosting period without significant penalty, and it is feasible for the customer to either run the software on its',
37518:'own hardware or contract with another party unrelated to the vendor to host the software, then the customer should account',
37519:'for the software in accordance with sffas 10. 32. ifthesharedservicearrangementincludesasoftwarelicense,thecustomershouldaccount for the software license element of the arrangement consistent with',
37520:'the acquisition of their other software licenses, as discussed in paragraph 24 of this tr. sffas 10 is not applicable',
37521:'to a shared service arrangement that does not convey a contractual right to the ius or to ones that do',
37522:'not include an ius license. agile software development method 33. agile software development method is a group of software development',
37523:'methods in which requirements and solutions evolve through collaboration between selforganizing, cross functional teams. in an agile project, working software',
37524:'is deployed in iterations of typically one to eight weeks in duration, each of which provides a segment of functionality.13',
37525:'initial planning regarding cost, scope, and timing is usually conducted at a high level, and the project status is primarily',
37526:'evaluated based on software demonstrations. 34. the ius development phases listed in sffas 10, paragraphs 1014, and within this tr',
37527:'could be applied to agile development projects on an iteration basis. if an iteration developed meets the module or component',
37528:'asset definition in accordance with sffas 10, paragraph 33, and as discussed in paragraph 15 of thistr, then it could',
37529:'be treated as an individual ius project and would be accounted for in accordance with sffas 10. if the numbers',
37530:'of iterations are dependent on the outcomes of multiple processes for a complete function, the cost incurred in these iterations',
37531:'should be grouped together based on the nature of the activities capital or expense and treated as one project for',
37532:'the purposes of recognition, measurement, and disclosure in accordance with sffas 10. any future incremental releases that result in additional',
37533:'functionality can be treated as an enhancement of the original ius project and accounted for in accordance with sffas 10.',
37534:'13government accountability office: software development effective practices and federal challenges in applying agile methods, july 2012. page 11 technical release',
37535:'16 fasab handbook, version 20 06/21 technical release 16 spiral software development method 35. spiral software development method combines the',
37536:'features of the waterfall and prototyping14 incremental models, but with more emphasis placed on risk analysis and management. the spiral',
37537:'methodology projects are typically separated into phases like the waterfall method: planning, risk analysis, engineering, and evaluation. however, they are',
37538:'broken up into incremental releases of the product, or incremental refinement through each time around the spiral and through continuously',
37539:'analyzing the requirements and improving thedefinition andimplementation.at each iteration aroundthecycle, the projectisimproved and extended. the release could be to an',
37540:'external or internal client, or to a partner. 36. the ius development phases listed in sffas 10, paragraphs 1014, and',
37541:'within this tr could be applied to a spiral development project on a process iteration basis. if an iteration developed',
37542:'meets the module or component asset definition in accordance with sffas 10 and as discussed in paragraph 15 of this',
37543:'tr, then it could be treated as an individual ius project and would be accounted for in accordance with sffas',
37544:'10. if the number of iterations are dependent on the outcomes of multiple spiral processes for a complete function, the',
37545:'cost incurred in these iterations should be grouped together based on the nature of the activities capital or expense and',
37546:'treated as one project for the purposes of recognition, measurement, and disclosure in accordance with sffas 10. any future incremental',
37547:'releases that result in additional functionality can be treated as an enhancement of the original ius project and accounted for',
37548:'in accordance with sffas 10. summary of illustrations 37. the business events & deliverables for software development phases and the',
37549:'common agencypractice tableslistedinappendixb supportdevelopment of accounting policiesand practices appropriate to each organizations characteristics in accordance with gaap. the tables are',
37550:'meant to provide examples for reporting entities to consider in developing organizational accounting policies and practices that will best support',
37551:'their operating models, provide the financial information necessary to manage programs, and report in accordance with gaap. reporting entities should',
37552:'report the ius in the general purpose financial reports. full costs of ius development should be expensed or capitalized in',
37553:'14the prototyping model is a system development method in which a prototype an early approximation of a final system or',
37554:'product is built, tested, and then reworked as necessary until an acceptable prototype is finally achieved from whichthecompletesystem or product',
37555:'cannowbe developed. this modelworks bestin scenarios where not allof the project requirements are known in detail ahead of time. it',
37556:'is an iterative, trialanderror process that takes place between the developers and the users. page 12 technical release 16 fasab',
37557:'handbook, version 20 06/21 technical release 16 accordance with gaap and each entitys accounting policies and practices should support cost',
37558:'beneficial implementation. effective date 38. this technical release is effective upon issuance. the provisions of this technical release need not',
37559:'be applied to immaterial items. page 13 technical release 16 fasab handbook, version 20 06/21 technical release 16 appendixa: basis',
37560:'for conclusions this appendix discusses some factors considered significant byaapc members in reaching the conclusions in this technical release. it',
37561:'includes the reasons for accepting certain approaches andrejectingothers. individualmembersgavegreater weight tosomefactorsthantoothers. the guidance enunciated in thistechnical releasenot the material in',
37562:'this appendixshould govern the accounting for specific transactions, events, or conditions. project history a1. in june 2013, fasabsaapc establishedtheiustaskforcetoassistindeveloping implementation',
37563:'guidance for ius as it relates to sffas 10,accounting for internal use softwareandotherrelatediusguidancedevelopedbythefasab. thetaskforceincludes federal agency representatives who are experiencing',
37564:'issues with implementing sffas 10 and those who have implemented workable common practices to share with the federal community as',
37565:'well as industry representatives from several public accounting and consulting firms. a2. during the initial phase of the project, the',
37566:'ius task force divided into three subgroups to conduct research and explore the best approach for addressing current ius issues',
37567:'within the federal community, including whether a tr should be developed, or revisions should be made to sffas 10. the',
37568:'subgroups met separately to discuss their assigned issues and report their research findings. the three subgroups were: a. ius mapping',
37569:'team b. ius benchmarking team c. standardsteam a3. after presentingtheresults oftheir researchtothefasabandaapc,thetaskforce concluded that implementation guidance would address the current',
37570:'ius issues within the federalcommunity. asaresult, theaapc endorsedtheapproach. the groupheldareentrance meeting on february 27, 2015 to reengage agencies in drafting',
37571:'implementation guidance. this guidance focused on highlighting the common issues identified across the federal government ius process, clarifying terminology, introducing',
37572:'new terms from the recent software development methodologies in light of application of sffas 10, and providing sample ius practices',
37573:'adopted by the agencies. based on the research, a tr would equip federal agencies with the knowledge and information needed',
37574:'to identify effective ius practices that would in turn strengthen financial reporting in ius area. it consists of two major',
37575:'topic areas: page 14 technical release 16 fasab handbook, version 20 06/21 technical release 16 a. standards clarification b. practical',
37576:'examples of implementation a4. the ius fasab task force, which included industry representatives from several public accounting and consulting firms,',
37577:'as well as representatives from the following federal agencies, developed this proposed guidance: a. department of commerce doc b. department',
37578:'of defense dod including the individual military departments c. department of health and human services hhs d. department of homeland',
37579:'security dhs e. department of labor dol f. department of transportation dot g. department of treasury treasury h. environmentalprotectionagencyepa i.',
37580:'office of the director of national intelligence odni j. united states securities and exchange commission sec a5. two subgroups were',
37581:'formed for standards clarification and best practices. the subgroups developed two data calls to highlight the commonalities across the federal',
37582:'ius process. the first data call aided federal agenciesin clarifyingterminologyand identified popular new ius development items. the second data call',
37583:'highlighted ius current practices adopted by the agencies and identified ius development phase activities across the ius development phases. the',
37584:'second data call also collected detail business events and typical deliverables during ius development phases. both data callsequip federal agencieswith',
37585:'the knowledge and information needed to strengthen financial reporting. a6. in reaching conclusions, the subgroups recognized the need to develop',
37586:'implementation guidance to promote an understanding of rapid changes related to software development practices that have evolved since the inception',
37587:'of sffas 10. the ius task force views clarification of implementation and sustainment issues as critical given the new ius',
37588:'challenges related to environmental changes and technological advances. there are several costbeneficial and reasonable changes for example, policies, systems, and',
37589:'processes that federal entities can make to facilitate better financial management and reporting of ius. however, entity management must be',
37590:'allowed to navigate within the parameters of gaap to determine the point at which the costs of improving or providing',
37591:'financial information outweigh the derived benefits. a7. this tr recognizes that the financial management information needs of stakeholders, both internal',
37592:'and external, vary by entity. the agencyspecific examples detailed inappendix b demonstrate how tracking costs to specific invoices may be',
37593:'tailored to different operating models and comply with gaap. the implementation guidance does not provide a onesize page 15 technical',
37594:'release 16 fasab handbook, version 20 06/21 technical release 16 fitsall solution; instead, it is designed to give management a',
37595:'tool on which to base stakeholder financial management information needs. a8. when applying the principles listed in sffas 10, management',
37596:'should develop formalized policies and procedures documenting their decisions. management is responsible for maintaining adequate documentation on the sources of',
37597:'data and the application of methodologies used when estimating cost. a9. implementation of sffas 10 and this guidance is a',
37598:'joint effort of an entitys chief finance office and chief information office. it is managements responsibility to provide for smooth',
37599:'communication between these two offices to foster an efficient and effective ius implementation process. responses to the proposal a10.theaapc received',
37600:'12 responses to the exposure draft from the following sources: table 1.0 types of respondents federal internal nonfederal external users,',
37601:'academics, others 1 auditors 1 preparers and financial 10 managers total 10 2 a11.theaapc considered responses to the exposure draft',
37602:'at its november 19, 2015, public meeting. theaapc did not rely on the number in favor of or opposed to',
37603:'a given position. information about the respondents majority view is provided only as a means of summarizingthecomments. theaapc consideredtheargumentsin each',
37604:'response and weighed the merits of the points raised. a12.of the 12 responses, nine supported the proposal. the remaining three',
37605:'offered comments. theaapc made editorial changes suggested by the respondents. page 16 technical release 16 fasab handbook, version 20 06/21',
37606:'technical release 16 aapc & boardapproval a13.the technical release was approved by theaapc for release to the fasab for issuance.',
37607:'the board has reviewed thistechnical release and a majorityof its members do not object to its issuance. written ballots are',
37608:'available for public inspection at the fasabs offices. page 17 technical release 16 fasab handbook, version 20 06/21 technical release',
37609:'16 appendix b: illustrations the examples in thisappendix are for illustration only; they do not represent authoritative guidance. these illustrations',
37610:'depict only a portion of the reporting entities operations and their inclusion in this tr does not equate to policy',
37611:'acceptance, in whole or part, by the fasab or the aapc. illustrations b1: business events and deliverables for software development',
37612:'phases thetablebelowprovidesexamplesofbusinesseventsanddeliverableswhichagenciesmaysee within a typical software development lifecycle. the table is structured to follow the three software development phases as',
37613:'defined in sffas 10, paragraphs 1114. when applying examples in this table to software development phases, the decision to capitalize',
37614:'or expense an item should be determined based on the nature of the cost activity when it is incurred, in',
37615:'accordance with sffas 10 paragraph 16 and as discussed in paragraph 12 of this tr: it states that costs incurred',
37616:'during the development phase should be capitalized, while the costs incurred inotherphasesshouldbeexpensed. however,softwaremaynot alwaysbedevelopedunderthis linear approach and capitalizationdecisionsabsent distinct phasesare',
37617:'moredifficult. regardless of timing, the cost incurred for development phase activities should be capitalized or expensed based on provisions of',
37618:'sffas 10 and considering their substance rather than their phase. the table may be used as a sample guide for',
37619:'categorizing business events and deliverables during ius phases, but it is not intended to be comprehensive. each agency is responsible',
37620:'for developing policies and procedures that are appropriate for its specific environment and needs and may differ in content and',
37621:'order from the table below. page 18 technical release 16 fasab handbook, version 20 06/21 technical release 16 business event',
37622:'typical deliverables preliminary design phase formulation of alternatives15 15 omb circular a11 provides more information for alignment of agency it',
37623:'investments with agency strategic plans. justification of investment need major information technology it business cases, conceptual formulation of alternatives capital',
37624:'investment decision paper, evaluation and testing of alternatives information resources management strategic plan, determination of existence of needed technology enterprisearchitecture',
37625:'roadmap, it capital asset final selection of alternatives summary, agency it portfolio summary submissions, alternative of analysis report establish project',
37626:'governance identify and incorporate vision, roles, responsibilities, project charter, projectaction/risk register, quality governance, organizations, and authorizations in project management plan,',
37627:'project schedule, project plan, charter work breakdown structure identify and document risks specific to project, including security risks establish and',
37628:'document quality control practices develop highlevel estimates and schedule update discoveries and additional information determine requirements develop high level list',
37629:'of functional and nonfunctional vision documents, requirement specification requirements document, requirement traceability matrix, process obtain, review and document detailed business',
37630:'flow diagrams, supplementary specifications, use specifications for business requirements cases, user workflow determine and document general data flows and interactions',
37631:'with other systems determine detailed business/system specifications to support requirements develop software development plan create initial plan to define major',
37632:'releases of project and phases define configuration management practices define testing strategy for user acceptance, quality assurance and other necessary',
37633:'testing project schedule, release specifications, software development plan, test strategy, quality assurance qa test plan risk management plan, user interface',
37634:'design documents, solution design document page 19 technical release 16 fasab handbook, version 20 06/21 technical release 16 business event',
37635:'typical deliverables procurement create request for information rfi or request for rfi/rfp, procurement management plan, contract proposal rfp for external',
37636:'vendor services or products statement of work evaluate and select externally provided services or products rapid prototype/pilot rapid prototype development',
37637:'and evaluation to refine prototype executable version offunctionandinterface, requirements and prove concept requirements survey,pilot program, evaluationof pilot, pilot of proposed',
37638:'solution on small scale and over scope management plan limited timeframe to prove concept and refine requirements update schedule and',
37639:'cost baseline based on discoveries from elaboration phase development phase software development initiation refine and execute practices for artifacts &',
37640:'softwarearchitecture description document, software configuration development plan, iteration plan, operational plan, review work performed in prior iterative period, software design',
37641:'description prioritize and assign work to be done in next iterative period coordinate updates to system interdependencies develop operations plan',
37642:'define and document architecture specifications develop and validate high value/high risk requirements of architecture components rapid development risk evaluation studies',
37643:'and analysis are performed during development environment to identify potential risks based on requirements & developed iteration risk identification and',
37644:'mitigation plan, contingency plan coding and system design execute practices for version control of all software softwarearchitecture document, development plan,',
37645:'development artifacts updated project management documents, issue log, create, design and modify system and associated critical design review memorandum, quality',
37646:'hardware; coding and continuous refining. management plan update project plan & business case add software development issues to the issue',
37647:'log to be prioritized and addressed conduct critical design review establish and document quality control practices page 20 technical release',
37648:'16 fasab handbook, version 20 06/21 technical release 16 business event typical deliverables testing identify tests and write test cases',
37649:'or scripts install hardware. conduct unit and integration testing createoperations manual andrequirementdocuments for users document strategy and approach for system',
37650:'implementation what will be deployed, where, and when prepare turnover package to migration turnover and test readiness review and issue',
37651:'memo prepare detailed notes that describe the specific contents of a release for customer or outside testing party develop security',
37652:'test report and issue security certification and accreditation conduct user acceptance testing test plan, test cases scripts, test results, operations',
37653:'manual, implementation plan, test readiness memorandum, release notes, turnover package, transition plan, security test report, security certification andaccreditation, security test',
37654:'& evaluation plan, softwarearchitecture document, acceptance test plan, acceptance test script readiness review and release conduct production readiness review and',
37655:'issue memo audit and project completion reports finalized issue operational readiness memo, certification of production, and final user acceptance testing',
37656:'memorandum production readiness review memo, transition plan, operational readiness memorandum,audit andproject completion reports, certification of production, final user acceptance testing',
37657:'memorandum, user manual, operational support plan, installation plan postimplementation/ operational phase deployment determine criteria for exiting transition phase controls have',
37658:'been identified and met stakeholder provides written approval that product meets documented business requirements revise and finalize detail deployment/implementation plan',
37659:'update project management documents, scope verification, deployment/implementation plan training develop training delivery method, schedule, and plan develop training materials deliver',
37660:'training, record, and deliver webinars and communicate ondemand training training plan, training materials, training delivery page 21 technical release 16',
37661:'fasab handbook, version 20 06/21 technical release 16 business event typical deliverables data conversion development of software to facilitate data',
37662:'transfer or conversion develop data cleansing and transfer plan, including protocols for archiving legacy data perform activities to cleanse data',
37663:'and format for transfer perform mock migrations of data and analyze results perform final data migration and validation data transfer',
37664:'software, data transfer plan, formatted data, mock migration results andanalysis report, data migration validation report operation and maintenance activities subsequent',
37665:'security accreditations not included in user acceptance testing software diagnostics repair processing and/or performance failures update documentation minor software updates',
37666:'minor corrections to design flaws accreditationcertification,diagnosticreports,software and process documentation retirement of software information preservation configuration management and control media sanitization',
37667:'hardware and software disposal disposal certification illustrations b2: commonagency practice thecommon agencypracticetablehighlightsiuspracticesadoptedbytheagenciesinthe areas identified by the ius working group as',
37668:'common challenges. it intends to equip federal agencies with the knowledge and information needed to identify effective ius practices and',
37669:'does not provide a ‘onesizefitsall’ solution; instead, it is designed to give management some practical examples. users of thistr should',
37670:'use the information provided in these examples to develop their own reasonable business processes. this table covers four areas of',
37671:'ius development: 1 identifying cost, 2 softwareamortization, 3 enhancement to ius, and 4 impairment to ius. page 22 technical release',
37672:'16 fasab handbook, version 20 06/21 technical release 16 illustration sample 1: identifying cost challenge statement: trace development cost to',
37673:'specific invoice challengecontributingfactors task force member agency agency practice cyclical development methodologies make differentiating between development and maintenancecostswithin an invoice',
37674:'difficult a direct tracing or allocating the invoiced cost with the basis of estimate documented. use status report or program/project',
37675:'documentation to evaluate activities and identify those that are development activities. b contractual requirement for vendor to provide a data',
37676:'item description deliverable with the estimate of costs between development and non development activities along with each monthly invoice submitted.',
37677:'c ius cost primarily attributable to government labor hours. quarterly report from the program offices detailing the employee or contract',
37678:'hours for each ius project phase preliminary design, development, or operational. d separate accounting lines used on purchase request and',
37679:'obligation document for development and nondevelopment activity cost by coding every software project on a requisition. the captalizable requisition must',
37680:'be coded with general ledger account iusin development in the accounting string which drives the purchase order and vouchers, thereby',
37681:'requiring the vendor to invoice in accordance with the activity breakouts. illustration sample 2: softwareamortization challenge statement: timing of commencement',
37682:'of depreciation/amortization challengecontributingfactors task force member agency agency practice obtaining evidence to support the determination of commencement of amortization a',
37683:'open inter departmental communication facilitates decision to begin depreciation of software. b a sign off document confirming key development milestones',
37684:'such as acceptance test are met. c a certificate of production is issued communicating the software is in production and',
37685:'being utilized. page 23 technical release 16 fasab handbook, version 20 06/21 technical release 16 illustration sample 3: enhancement to',
37686:'ius challenge statement: define enhancement to internal use software challenge contributingfactors task force member agency determination of the significance of',
37687:'an enhancement to the ius, incrementalenhancementof capability, and the enhancement associated with new ius development model a defines enhancement to',
37688:'be the replacement, upgrade, modification, or addition of new features or capabilities to an existing system, product, tool, service, or',
37689:'infrastructure to improve its functionality. it involves a change in the capabilities, requirements, design, and/or architecture. b add additional capabilities',
37690:'and the enhancement costs are above agencys capitalization threshold. repair a design flaw or perform minor upgrades that extend the',
37691:'useful life without adding capabilities, the costs are expensed and the useful life of the original asset is adjusted, as',
37692:'necessary. c enhancement cost exceed capitalization threshold, and when it is more likely than not that such enhancements will result',
37693:'in a significant increase in functionality that is apparent to the user. the cost of routine or minor changes or',
37694:'modernizations that do not significantly add functionality should be expensed in the period incurred. examples of minor enhancement include updating',
37695:'data tables, webenabling, customizing reports, or changing graphic user interfaces. enhancements that may extend the useful life of the software',
37696:'without adding significant capabilities are to be considered minor and expensed. d inagile development model, enhancement follows the same capitalization',
37697:'criteria threshold for each release separately and tracks each version individually. page 24 technical release 16 fasab handbook, version 20',
37698:'06/21 technical release 16 illustration sample 4: impairment to ius challenge statement: determination of impairment for internal use software challenge',
37699:'contributingfactors task force member agency agency practice determination of when the impairment is incurredwithoutsufficient knowledge on the ius operating status',
37700:'a scenariobased impairment checklist reviewed on a quarterly basis to monitor impairment. the checklist examines the following scenarios: cessation of',
37701:'demand for the ius asset, changes with an adverse effect on the ius asset have occurred within the policy, legal',
37702:'or technological environment, plans to discontinue or restructure the ius asset, the ius asset is not performing as intended, and',
37703:'elements of the ius asset functionality are not used as intended. page 25 technical release 16 fasab handbook, version 20',
37704:'06/21 technical release 16 appendix c:abbreviations aapc accountingandauditingpolicycommittee cots commercial off the shelf dhs department of homeland security doc department',
37705:'of commerce dod department of defense dol department of labor dot department of transportation epa environmentalprotectionagency fasab federalaccountingstandardsadvisoryboard gaap generallyacceptedaccountingprinciples',
37706:'hhs department of health and human services it information technology ius internal use software nist national institute of standards and',
37707:'technology odni office of the director of national intelligence omb office of management and budget pp&e property, plant, and equipment',
37708:'qa qualityassurance rfi request for information rfp request for proposal sec united states securities and exchange commission sffac statementoffederalfinancialaccountingconcepts sffas',
37709:'statementoffederalfinancialaccountingstandards tr technical release treasury department of treasury page 26 technical release 16 fasab handbook, version 20 06/21 technical release',
37710:'17: conformingamendments totechnicalreleasesforsffas50,establishingopeningbalances for general property, plant, and equipment status issued april 10, 2017 effective date effective upon issuance affects',
37711:'technical releases 13, 15 and 16 are amended. affected by none. summary statement of federal financialaccounting standards sffas 50, establishing',
37712:'opening balances for general property, plant, and equipment, amended sffas 6, accounting for property, plant, and equipment, and sffas 10,',
37713:'accounting for internal use software, and rescinded sffas 35, estimating the historical cost of general property, plant, and equipment: amending',
37714:'statements of federal financial accounting standards 6 and 23. thistechnicalreleasetrprovides amendments to previously issuedtrs to acknowledge the rescission of sffas',
37715:'35. it also clarifies that all standardslevel implementation guidance for general property, plant, and equipment with the exception of certain',
37716:'provisions applicable to internal use software now resides in sffas 6, as amended. specifically, this tr provides conforming amendments to',
37717:'the following documents: technical release 13, implementation guide for estimating the historical cost of general property, plant, and equipment technical',
37718:'release 15, implementation guidance for general property, plant, and equipment cost accumulation, assignment and allocation technical release 16, implementation guidance',
37719:'for internal use software thistr does not provide a complete update of the abovetrs; the amendmentsconformthetr documents to the provisions',
37720:'of sffas 50. aseparate tr will be issued that addresses sffas 50specific implementation issues associated with the alternative methods of',
37721:'arriving at deemed cost. the provisions of this tr need not be applied to immaterial items. the determination of whether',
37722:'an item is material depends on the degree to which omitting or misstating information about the itemmakesit probable that thejudgment',
37723:'of areasonablepersonrelying on theinformationwould have been changed or influenced by the omission or the misstatement. page 1 technical release 17',
37724:'fasab handbook, version 20 06/21 technical release 17 table of contents page summary 1 technical guidance 3 scope 3 amendments',
37725:'toexistingtechnicalreleases 3 effective date 7 appendixa:basis for conclusions 8 appendix b:abbreviations 11 page 2 technical release 17 fasab handbook, version',
37726:'20 06/21 technical release 17 technical guidance scope 1. readers of this technical release tr should first refer to the',
37727:'hierarchy of accounting standards in statement of federal financialaccounting standards sffas 34, the hierarchy of generally accepted accounting principles, including',
37728:'the application of standards issued by the financial accounting standards board. this tr supplements the relevant accounting standardsbut isnot a',
37729:'substitute for and does not take precedence over the standards. 2. the amendments addressed in this tr conform the following',
37730:'documents to certain provisions established by sffas 50, establishing opening balances for general property, plant, and equipment: amending statement of',
37731:'federal financial accounting standards sffas 6, sffas 10, sffas 23, and rescinding sffas 35: technical release 13, implementation guide for',
37732:'estimating the historical cost of general property, plant, and equipment technical release 15, implementation guidance for general property, plant, and',
37733:'equipment cost accumulation, assignment and allocation technical release 16, implementation guidance for internal use software amendments to existing technical releases',
37734:'technical release 13, implementation guide for estimating the historical cost of general property, plant, and equipment 3. this paragraph rescinds',
37735:'paragraphs 110 including all section titles, subsection titles, and the accompanying footnote 1 to par. 3 contained within the introduction',
37736:'and background sections of tr 13, implementation guide for estimating the historical cost of general property, plant, and equipment. this',
37737:'will eliminate potentially confusing references to the rescinded sffas 35, estimating the historical cost of general property, plant, and equipment:',
37738:'amending statements of federal financial accounting standards 6 and 23,and amended portions of other statements. 4. this paragraph amends the',
37739:'technical guidance section of tr 13 by inserting the subheading scope with paragraphs10a10c directly under technical guidance as follows: page',
37740:'3 technical release 17 fasab handbook, version 20 06/21 technical release 17 technical guidance scope 10a. readers of thistechnical release',
37741:'tr should first referto the hierarchy of accounting standards in statement of federal financialaccounting standards sffas 34, the hierarchy of',
37742:'generally accepted accounting principles, including the application of standards issued by the financial accounting standards board. this tr supplements the',
37743:'relevantaccounting standardsbut isnot asubstituteforanddoesnot takeprecedenceover the standards. 10b. sffas 6, accounting for property, plant, and equipment, as amended provides that',
37744:'reasonable estimates may be used to establish historical cost of general property, plant, and equipment pp&e in accordance with the',
37745:'asset recognition and measurement provisions within sffas 6. this is also applicable to internal use software when the software meets',
37746:'the criteria for general pp&e in accordance with sffas 10,accounting for internal use software. 10c. sffas 50, establishing opening balances',
37747:'for general property, plant, and equipment: amending statement of federal financial accounting standards sffas 6, sffas 10, sffas 23, and',
37748:'rescinding sffas 35, amended sffas 6 to allow a reporting entity, under specific conditions, to apply alternative valuation methods in',
37749:'establishing opening balances for general pp&e. 5. thisparagraphfurtheramendsthetechnicalguidanceintr13byinsertingthesubheading effective date with the following paragraph directly under the scope section added',
37750:'in paragraph 4 above as follows: effective date 10d. this tr is effective upon issuance. 6. thisparagraphamendstheexamplesofpracticeprovidedintr13byrescindingfootnotes 24 of paragraph',
37751:'12 and replacing paragraphs 11 and 12 as follows: 11. the examples outlined in this guide illustrate the use of',
37752:'various estimating methodologies to derive the historical cost of general pp&e in accordance with sffas 6, as amended.although the measurement',
37753:'basis for valuing general pp&e remains historical cost, reasonable estimates may be used to establish the historical cost of general',
37754:'pp&e in accordance with the asset recognition and measurement provisions of sffas 6, as amended.1a 1asffas 50, establishing opening balances',
37755:'for general property, plant, and equipment: amending statement of federal financial accounting standards sffas 6, sffas 10, sffas 23, and',
37756:'rescinding sffas 35, provides for deemed cost to be used for opening balances in some cases. estimating historical cost is',
37757:'one of several deemed cost valuationmethods. thistraddresses theestimationof historical costand does not address otheracceptable deemed cost methods. page 4 technical',
37758:'release 17 fasab handbook, version 20 06/21 technical release 17 12. reasonable estimates may be based on a. cost of',
37759:'similar assets at the time of acquisition; b. current cost of similar assets discounted for inflation since the time of',
37760:'acquisition that is, deflating current costs to costs at the time of acquisition by general price index; or c. other',
37761:'reasonable methods, including latest acquisition cost and estimation methods based on information such as,but notlimited to, budget,appropriations, engineering documents, contracts,',
37762:'or other reports reflecting amounts to be expended. 12a. in some cases, the inservice date must be estimated. in estimating',
37763:'the year that the base unit was placed in service, if only a range of years can be identified, then',
37764:'the midpoint of the range is an acceptable estimate of the inservice date. technical release 15, implementation guidance for general',
37765:'property, plant, and equipment cost accumulation, assignment and allocation 7. this paragraph amends tr 15, implementation guidance for general property,',
37766:'plant, and equipment cost accumulation, assignment and allocation, by revising the last sentence of paragraph 12 as follows: this technical',
37767:'release clarifies but does not change guidance provided in sffas 4, or sffas 6 as amended., sffas 23, or sffas',
37768:'35. the revised paragraph 12 of tr 15 is as follows: readersof thistechnicalrelease should first referto thehierarchyof accounting standards in',
37769:'sffas 34, the hierarchy of generally accepted accounting principles, including the application of standards issued by the financial accounting standards',
37770:'board. this technical release supplements the relevant accounting standards, but is not a substitute for and does not take precedence',
37771:'over the standards. this technical release clarifies but does not change guidance provided in sffas 4 or sffas 6 as',
37772:'amended. 8. thisparagraphamendstr15,paragraphs1and14,byupdatingitfortheamendedsffas 6, paragraph 26, language and adding as amended after sffas 6. the following language was added as',
37773:'the second sentence of sffas 6, paragraph 26: although the measurement basis for valuing general pp&e remains historical cost, reasonable',
37774:'estimates may be used to establish the historical cost of general pp&e, in accordance with the asset recognition and measurement',
37775:'provisions herein. the revised paragraph 1 of tr 15 is as follows: 1. statement of federal financialaccounting standards 6 sffas',
37776:'6, accounting for property, plant, and equipment, as amended outlines the recognition requirements for page 5 technical release 17 fasab',
37777:'handbook, version 20 06/21 technical release 17 general property, plant, and equipment gpp&e except for internal use software. paragraph 26',
37778:'states that, all general pp&e shall be recorded at cost. although the measurement basis for valuing general pp&e remainshistorical cost,',
37779:'reasonableestimatesmaybeusedtoestablishthehistoricalcost ofgeneralpp&e, in accordance with the asset recognition and measurement provisions herein. cost shall include all costs incurred to bring',
37780:'the pp&e to a form and location suitable for its intended use. …. theaapc gpp&e cost accounting issues subgroup was',
37781:'developed to address a request for implementation guidance for these requirements. the revised paragraph 14 of tr 15 is as',
37782:'follows: 14. sffas 6 as amended, paragraph 26, states: all general pp&e shall be recorded at cost. although the measurement',
37783:'basis for valuing general pp&e remains historical cost, reasonable estimates may be used to establish the historical cost of general',
37784:'pp&e, in accordance with the asset recognition and measurement provisions herein. cost shall include all costs incurred to bring the',
37785:'pp&e to a form and location suitable for its intended use. for example, the cost of acquiring property, plant, and',
37786:'equipment may include:  amounts paid to vendors;  transportation charges to the point of initial use;  handling and',
37787:'storage costs;  labor and other direct or indirect production costs for assets produced or constructed;  engineering, architectural, and',
37788:'other outside services for designs, plans, specifications, and surveys;  acquisition and preparation costs of buildings and other facilities; ',
37789:'an appropriate share of the cost of the equipment and facilities used in construction work;  fixed equipmentand related installationcostsrequired',
37790:'foractivitiesin abuildingor facility;  direct costs of inspection, supervision, and administration of construction contracts and construction work;  legal and',
37791:'recording fees and damage claims;  fair value of facilities and equipment donated to the government; and  material amounts',
37792:'of interest costs paid [fn30: interest costs refers to any interest paid by the reporting entity directly to providers of',
37793:'goods or services related to the acquisition or construction of pp&e.]. page 6 technical release 17 fasab handbook, version 20',
37794:'06/21 technical release 17 9. this paragraphrescinds paragraph10andtheprecedingtitle relatedaccounting literature of tr 15. technical release 16, implementation guidance for internal',
37795:'use software 10. this paragraphrescinds paragraph7andtheprecedingtitle relatedaccounting literature of tr 16, implementation guidance for internal use software. 11. this paragraph',
37796:'amends tr 16, paragraph 8, by revising the last sentence as follows: this tr clarifies but does not change guidance',
37797:'provided in sffas 4, 5, 6 as amended, or 10., and 35. the revised paragraph 8 of tr 16 is',
37798:'as follows: readers of this technical release tr should first refer to the hierarchy of accounting standards in statement of',
37799:'federal financialaccounting standards sffas 34, the hierarchy of generally accepted accounting principles, including the application of standards issued by the',
37800:'financial accounting standards board. this tr supplements the relevant accounting standardsbut isnot a substitute for and does not take precedence',
37801:'over thestandards. thistrclarifiesbut doesnot changeguidanceprovided insffas4, 5, 6as amended, or 10. effective date 12. this tr is effective upon issuance.',
37802:'the provisions of thistechnical release need not be applied to immaterial items. page 7 technical release 17 fasab handbook, version',
37803:'20 06/21 technical release 17 appendixa: basis for conclusions thisappendixdiscussessomefactorsconsideredsignificant bycommitteemembersin reaching the conclusions in thistechnical release. it includes the',
37804:'reasons for accepting certain approaches and rejecting others. individual members gave greater weight to some factors than to others. the',
37805:'guidance enunciated in this technical releasenot the material in this appendix should govern the accounting for specific transactions, events, or',
37806:'conditions. this technical release may be affected by later statements or other pronouncements. the fasab handbook is updated annually and',
37807:'includes a status section directing the reader to any subsequent pronouncements that amend thistechnical release. within the text of the',
37808:'technical release, the guidance sections are updated for changes. however, this appendix will not be updated to reflect future changes.',
37809:'the reader can review the basis for conclusions of the amending statements or other pronouncements for the rationale for each',
37810:'amendment. project history a1. onaugust4,2016,thefederalaccountingstandardsadvisoryboardfasabor the board issued sffas 50, establishing opening balances for general property, plant, and equipment: amending',
37811:'statement of federal financial accounting standards sffas 6, sffas 10, sffas 23, and rescinding sffas 35. sffas 50 amended several',
37812:'statements and rescinded sffas 35, estimating the historical cost of general property, plant, and equipment: amending statements of federal financial',
37813:'accounting standards 6 and 23. a2. as a result of these amendments and this rescission, all standardslevel implementation guidance for',
37814:'general pp&e, with the exception of specific provisions applicable to internal use software, now resides in sffas 6, accounting for',
37815:'property, plant, and equipment as amended. the board concluded that providing implementation guidance for general pp&e other than internal use',
37816:'software in sffas 6 provides a comprehensive guide for users in a single statement. a3. during the due process of',
37817:'sffas 50, exposure draft ed respondents expressed concern about the rescission of sffas 35. these respondents relied on the guidance',
37818:'it provided and worried about audit issues that might result upon its rescission. tr 13, implementation guide for estimating the',
37819:'historical cost of general property, plant, and equipment, remains in effect regardless of these amendments and this rescission. a4. comments',
37820:'received during due process of sffas 50 made it apparent that users rely on the technical guidance provided in tr',
37821:'13 when developing reasonable estimates. further, tr 15, implementation guidance for general property, plant, and equipment cost page 8 technical',
37822:'release 17 fasab handbook, version 20 06/21 technical release 17 accumulation, assignment and allocation, provides illustrations and implementation guidance related',
37823:'to recognition requirements for programmatic, managerial, administrative, andother elementsof programcostsincurred during the general pp&e lifecycle. tr15 also provides illustrations and',
37824:'implementation guidance related to recognition requirements for decisions regarding the granularity of cost information and acceptable methods for recognizing those',
37825:'costs. therefore, it was appropriate to ensure each significant provision of sffas 35 was incorporated in the amendments of tr',
37826:'13, 15, and 16including the ability to use estimates in the future. amendments to existing technicalreleases a5. itwasappropriatetoupdatepreviouslyissuedtrstoacknowledgetherescissionofsffas 35 and',
37827:'that all standardslevel implementation guidance for general pp&e with the exception of certain provisions applicable to internal use software resides',
37828:'in sffas 6 as amended. a6. the conforming amendments apply to the following documents: technical release 13, implementation guide for',
37829:'estimating the historical cost of general property, plant, and equipment technical release 15, implementation guidance for general property, plant, and',
37830:'equipment cost accumulation, assignment and allocation technical release 16, implementation guidance for internal use software a7. theaccountingandauditingpolicycommitteeaapcor thecommitteeconcludedthatit was appropriate',
37831:'to amend relevant sections of the trs that discussed sffas 35 and other sections that referenced implementation guidance for general',
37832:'pp&e. the committee removed certain language from areas such as the introduction and background sections because of the lengthy discussion',
37833:'and reference to the rescinded sffas 35and portionsof amended statements. the committee concluded that allowing the paragraphs to remain would',
37834:'be inconsistent with current references for generally accepted accounting principles and would lead to potential misapplication of the technical guidance.',
37835:'a8. sffas 50 allows a reporting entity, under specific conditions, to apply alternative valuation methods in establishing opening balances for',
37836:'general pp&e. aseparate tr will be issued that addressessffas 50 implementation issuesassociated with thealternative methodsof arriving at deemed cost. page',
37837:'9 technical release 17 fasab handbook, version 20 06/21 technical release 17 summary of outreach efforts and responses a9. the',
37838:'ed titled conforming amendments to technical releases for sffas 50, establishing opening balances for general property, plant, and equipment was',
37839:'issued november 22, 2016, with comments requested by january 9, 2017. a10.upon release of the ed, fasab provided notices and',
37840:'press releases to the fasab subscription email list, the federal register, fasab news, the journal of accountancy, association of governmentaccountantstopics,',
37841:'the cpa journal, government executive, the cpa letter, the chief financial officers council, the council of the inspectors general on',
37842:'integrity and efficiency, and committees of professional associations generally commenting on eds in the past for example, the greater washington',
37843:'society of cpas and theassociation of governmentaccountants financial management standards board. a11.theaapc received seven responses from preparers, auditors, users of',
37844:'federal financial information, and professional associations. the majority of respondents agreed with the proposals in the tr. a12.theaapc considered responses',
37845:'to the ed at its february 9, 2017, public meeting. the aapc did not rely on the number in favor',
37846:'of or opposed to a given position. information about the respondents majority view is provided only as a means of',
37847:'summarizing the comments. theaapc considered the arguments in each response and weighed the merits of the points raised. a13.of the',
37848:'seven responses, six supported the proposal to acknowledge the rescission of sffas 35 and that all standardslevel implementation guidance for',
37849:'general property, plant, and equipment with the exception of certain provisions applicable to internal use software now resides in sffas',
37850:'6. one respondent neither agreed nor disagreed with the proposal. further, of the seven responses, six did not believe there',
37851:'were additional amendments or issues that theaapc should consider in thistr. aapc & boardapproval a14.the tr was approved by theaapc',
37852:'for release to the fasab for issuance. the board has reviewed thistr and a majority of its members do not',
37853:'object to its issuance. written ballots are available for public inspection at the fasab office. page 10 technical release 17',
37854:'fasab handbook, version 20 06/21 technical release 17 appendix b:abbreviations aapc accounting and auditing policy committee ed exposure draft fasab',
37855:'federalaccounting standardsadvisory board gaap generallyaccepted accounting principles gpp&e general property, plant, and equipment pp&e property, plant, and equipment sffas statement',
37856:'of federal financialaccounting standards tr technical release page 11 technical release 17 fasab handbook, version 20 06/21 technical release 18:',
37857:'implementation guidance for establishing opening balances status issued effective date affects affected by october 2, 2017 effective upon issuance none.',
37858:'none. summary statement of federal financialaccounting standards sffas 50, establishing opening balances for general property, plant, and equipment, permits a',
37859:'reporting entity, under specific conditions, to apply alternative methods in establishing opening balances for general property, plant, and equipment pp&e.',
37860:'this technical release tr provides additional guidance to those reporting entities in applying the alternative methods. thistr explains the alternative',
37861:'valuation methods in greater detail and describes examples of the acceptable types of documentation that may support the valuation as',
37862:'outlined in sffas 6, accounting for property, plant, and equipment, as amended. this tr does not provide guidance on the',
37863:'validation of the existence and completeness of general pp&e. the alternative methods provided in sffas 50 are meant to be',
37864:'less costly options to implement generallyaccepted accounting principles when establishing opening balances forgeneral pp&e. this tr acknowledges that the reporting',
37865:'entity may select any of the alternative methods and that there is no preferred method. management is not required to',
37866:'select the most precise or best method. while this tr is specific to reporting entities that apply sffas 50 or',
37867:'the alternative methods, there are additional trs the reporting entity may find helpful and still apply. for example, tr 13,',
37868:'implementation guide for estimating the historical cost of general property, plant, and equipment, addresses the estimation of historical cost, one',
37869:'of the deemed cost methods. materiality the provisions of this tr need not be applied to immaterial items. the determination',
37870:'of whether an item is material depends on the degree to which omitting or misstating information about the itemmakesit probable',
37871:'that thejudgment of areasonablepersonrelying on theinformationwould have been changed or influenced by the omission or the misstatement. page 1 technical',
37872:'release 18 fasab handbook, version 20 06/21 technical release 18 table of contents page summary 1 technical guidance 3 scope',
37873:'3 alternative methods 3 effective date 24 appendixa:basis for conclusions 25 page 2 technical release 18 fasab handbook, version 20',
37874:'06/21 technical release 18 technical guidance scope 1. readers of this technical release tr should first refer to the hierarchy',
37875:'of accounting standards in statement of federal financialaccounting standards sffas 34, the hierarchy of generally accepted accounting principles, including the',
37876:'application of standards issued by the financial accounting standards board. this tr supplements the relevant accounting standardsbut isnot a substitute',
37877:'for and does not take precedence over the standards. 2. sffas 50, establishing opening balances for general property, plant, and',
37878:'equipment, permits a reporting entity, under specific conditions, to apply alternative methods in establishing opening balances for general property, plant,',
37879:'and equipment pp&e. this tr provides additional guidance to those reporting entities in applying the alternative methods. alternative methods 3.',
37880:'this implementation guidance provides assistance in applying the alternative methods for opening balances. it explains the alternative valuation methods1 in',
37881:'greater detail and describes documentation that may support the valuation, as outlined in sffas 6, accounting for property, plant, and',
37882:'equipment, as amended. this tr does not provide guidance on validation of the existence and completeness of general pp&e. 4.',
37883:'in statementoffederalfinancialaccountingconcepts sffac1, objectives of federal financial reporting, the federalaccounting standardsadvisory board fasab or the board acknowledges that accounting standards',
37884:'sometimes necessitate judgments about the cost and benefits of producing information or of reporting it differently. the standards setter must,',
37885:'to some extent, be aware of these potential effects when considering the cost 1theaccounting andauditing policy committee developed this guidance',
37886:'to explain the alternative valuation methods and describe the documentation that may support the valuation as outlined in sffas 6,',
37887:'as amended. deemed cost one of the alternative valuation methods is also an acceptable valuation method for opening balances of',
37888:'inventory, operating materials, and supplies, and stockpile materials. sffas 48, opening balances for inventory, operating materials and supplies, and stockpile',
37889:'materials, amendedsffas 3, accounting for inventory and related property,to permit alternative valuation methods in establishing opening balances. reporting entities may',
37890:'reference relevant portions of this guidewhenestablishingopeningbalances inaccordance with sffas 3, par. 20,2226, 42, 44, and53, as amended. page 3 technical',
37891:'release 18 fasab handbook, version 20 06/21 technical release 18 and benefits of any given accounting alternative. the benefits of',
37892:'the standards should exceed the cost of applying them. 5. apremisefor issuingsffas50was toconsiderthecost andbenefit associatedwith establishing general pp&e opening balance',
37893:'information.as explained in the basis for conclusions of sffas 50, the board made the following conclusions: a6. the board noted',
37894:'that while dod has had numerous years to meet the standards and become gaap compliant,theyhavenot. conditionsremainthat existedwhenfasab issuedmanyofthesestandards, and the',
37895:'cost to implement all the standards concurrently is greater than would have been incurred if standards were implemented in a',
37896:'timely manner. the goal of this statement is to avoid requiring the expenditure of taxpayer dollars in recreating information that',
37897:'would have been of greater benefit in the past for example, toevaluatemajoracquisition/constructionprogramsastheywereexecuted, butforwhichthecurrentuseis limited to accountability and assessing the cost',
37898:'of current services. the board proposed less costly alternatives that will support this objective. a7. the board believes assisting dod',
37899:'with establishing a baseline benefits all parties. providing a starting point will enable dod to focus on needed improvements to',
37900:'systems and controls to process transactions going forward and thereby establish and maintain reliable financial information regarding future pp&e acquisitions.',
37901:'establishing a sound financial management system is of primary importance. 6. the alternative methods provided in sffas 6, as amended',
37902:'by sffas 50, are meant to be less costly options to implement generally accepted accounting principles gaap for general pp&e;',
37903:'this allows reporting entities to focus on needed improvements to systems and controlsto process transactionsgoingforward. byestablishing and maintaining reliable financial',
37904:'information, such reporting entities will be more informed about costs of future general pp&e acquisitions. 7. thealternativemethodsprovidetheneededflexibilityforestablishingopeningbalances. at times, it',
37905:'is not practical or cost effective to determine the historical cost of general pp&e because of inadequate systems and/or insufficient',
37906:'documentation. 8. the alternative methods include 1 using deemed cost as an alternative valuation method for opening balances of general',
37907:'pp&e, 2 selecting between deemed cost and prospective capitalization of internal use software, and 3 allowing an exclusion of land',
37908:'and land rights from opening balances with disclosure of acreage information and expensing of future acquisitions. management responsibility and documentation',
37909:'9. managementisresponsibleforestablishingaccountingpolicies,includingthedetermination of which method to use.any of the methods provided by sffas 6, as amended, are acceptable. it appears',
37910:'management would apply costbenefit considerations and other page 4 technical release 18 fasab handbook, version 20 06/21 technical release 18',
37911:'practical concerns under different alternatives. it is important to be mindful that the alternative methods for establishing opening balances are',
37912:'based on the concept of reasonable estimates and therefore do not seek precision.2 also, assessments of materiality and cost versus',
37913:'benefit should be guiding factors because costbeneficial options are a major goal of sffas 50. 10. the reporting entity may',
37914:'select any of the alternative methods when establishing opening balances; there is no preferred method among those permitted. therefore, making',
37915:'comparisons among the methods or attempting to identify the best method is inappropriate. management should expect to provide adequate documentation',
37916:'that is consistent with the method used and supports the overall reasonableness of the valuation. however, management is not required',
37917:'to select the most precise or best method. 11. management is also responsible for maintaining adequate documentation of data sources',
37918:'and the application of methodologies. it is reasonable to expect that sufficient, relevant and reliable historicalcost informationmaynot beavailablefor generalpp&ewhen applying',
37919:'the alternatives provided by sffas 50. in the absence of sufficient, relevant and reliable historical cost information on which to',
37920:'base the valuation, reporting entities should maintain supporting documentation for the alternative method and data used to establish opening balances.',
37921:'management should expect to support alternative methods with auditable documented information. adequate documentation of the source of the data and',
37922:'the application of the methodology used will help support managements assertion that the valuations are in compliance with accounting standards',
37923:'in all material respects. 12. the documentation should describe the methodology alternative method used and description and the reporting entitys',
37924:'review process to determine that the valuations are reasonable. while the documentation may differ from what is expected to support',
37925:'historical cost, it should be complete and stand on its own. that is, a knowledgeable, independent person could perform the',
37926:'same procedures in the methodology and replicate the results. this should be maintained in a manner to facilitate the auditors',
37927:'testing of the alternative methods. if the documentation were from a source that would normally be destroyed, then copies should',
37928:'be maintained for the purpose of reconstructing the amounts. 13. additional information, including specific examples of documentation that may be',
37929:'acceptable, is included under each alternative method. 2as used in this document, precision refers to an exact amount that represents',
37930:'the one correct amount. this is in contrast to a reasonable estimate, which refers to an amount that is within',
37931:'a reasonable range of possible amounts, based on what is being measured. page 5 technical release 18 fasab handbook, version',
37932:'20 06/21 technical release 18 deemed cost 14. the primary focus of this guidance is on the application of deemed',
37933:'cost. deemed cost is a surrogate for initial amounts and an acceptable valuation method for opening balances for general pp&e.',
37934:'use of deemed cost is intended to provide a costeffective approach to the adoption of sffas 6, as amended, where',
37935:'historical cost information and systems do not support such balances. 15. deemedcostmayincludeseveralvaluationmethodsbecausethereportingentitymayhave multiple component or subcomponent reporting entities3 1 using',
37936:'different methods simultaneously and/or 2 adopting a method permitted under sffas 6, as amended, at different times prior to establishing',
37937:'opening balances. large and complex reporting entities, such as the department of defense dod, may have used a variety of',
37938:'valuation methods. 16. it is acceptable for the reporting entity to have multiple component or subcomponent reporting entities that use',
37939:'various valuation methods simultaneously. deemed cost should be based on one, or a combination, of the following three valuation methods',
37940:'permitted by sffas 6, as amended: 1 replacement cost, 2 estimated historical cost, or 3 fair value. while no disclosure',
37941:'of the distinction or breakout of the amount of deemed cost of general pp&e included in the opening balance is',
37942:'required, documentation should clearly indicate the valuation method applied to each asset or class of assets. 17. while flexibility is',
37943:'offered, some options require additional disclosures,4 such as when component or subcomponent reporting entities elect to apply alternative methods5 besides',
37944:'deemed cost. sffas 6, as amended, provides that in the event a different alternative method is applied by a subcomponent',
37945:'reporting entity consolidated into a larger reporting entity, the alternative adopted by each significant subcomponent should be disclosed. 3sffas 47,',
37946:'reporting entity, provides that component reporting entity is used broadly to refer to a reporting entity within a larger reporting',
37947:'entity. examples of component reporting entities include organizations such as executive departments and agencies. component reporting entities would also include',
37948:'subcomponents that may themselves prepare general purpose federal financial reports gpffrs. one example is a bureau that is within a',
37949:'larger department that prepares its own standalone gpffr. 4see sffas 6, as amended, par. 40.hi and sffas 10, par. 36.fg',
37950:'for information about disclosures. 5as explained in par. 8, the alternative methods used toestablish opening balances of general pp&e include',
37951:'1 using deemedcost asanalternativevaluationmethodforopening balances ofgeneralpp&e,2selectingbetweendeemed cost and prospective capitalization of internal use software, and 3 allowing an exclusion of',
37952:'land and land rights from opening balances with disclosure of acreage information and expensing of future acquisitions. page 6 technical',
37953:'release 18 fasab handbook, version 20 06/21 technical release 18 18. adoption of deemed cost includes various valuation methods that',
37954:'may require the use of assumptions to develop an approximate initial amount when there is no precise means of measurement.',
37955:'19. there may be high uncertainty in the underlying assumptions used to establish opening balances under deemed cost methods. this',
37956:'guidance postulates that deemed cost will be subject to an inherent lack of precision because of the limitations regarding information',
37957:'available to the reporting entity. in using deemed cost, the reporting entity should consider the reasonableness of the assumptions selected,',
37958:'the relationship of the assumptions to the available documentation that is consistent with the methodology, and the overall reasonableness of',
37959:'the valuation. 20. this guidance provides a foundation for preparers to exercise judgment in developing surrogates for use as deemed',
37960:'cost. unlike some judgments that management makes, deemed cost will not be trued up to reflect the actual value in',
37961:'the future. as addressed by sffas 50, deemedcostisasurrogate forthe actualorhistoriccostassociatedwith general pp&e, and there is no expectation the deemed cost',
37962:'will be updated or changed for the passage of time, except for error corrections. said differently, when a reporting entity',
37963:'elects to adopt deemed cost to establish opening balances, the reporting entity establishes opening balances that are considered consistent with',
37964:'gaap. the established opening balances are not expected to be updated at a later point in time except for the',
37965:'recognition of the associated depreciation or to be evaluated retrospectively. 21. the methods are described more fully below and not',
37966:'listed in order of preference. replacement cost 22. replacement cost is the amount required for an entity to replace the',
37967:'remaining service potential of an existing asset in a current transaction at the reporting date, including the amount that the',
37968:'entitywould receive from disposing of the asset at the end of itsuseful life.6 the use of replacement cost would be',
37969:'applied for valuing opening balances and not maintained through revaluation in the future. 23. sffac 7, measurement of the elements',
37970:'of accrualbasis financial statements in periods after initial recording, explains replacement cost and that there may be several ways of',
37971:'arriving at an approximation of it: 6sffac 7, measurement of the elements of accrualbasis financial statements in periods after initial',
37972:'recording, par. 46. page 7 technical release 18 fasab handbook, version 20 06/21 technical release 18 47. replacement cost is',
37973:'a remeasured amount, an entry value that is often advocated for assets used in providing services, such as capital assets',
37974:'and inventory not held for sale. replacing the remaining service potential of an existing asset is not the same as',
37975:'acquiring an identical asset. however, in practice, it may be difficult to measure remaining service potential directly. there may be',
37976:'several ways of arriving at an approximation. for example, one waywould be to measurethe current cost of a similar asset,',
37977:'reducedby an appropriate amount to allow for the lower service potential of the existing asset due to its age and',
37978:'condition. thus, the replacement cost of an asset is not the same as the fair value of either an equivalent',
37979:'new asset or theexistingassetat thereportingdate. for example,toarriveatthe replacement cost ofafiftyyearoldoffice building at the midpoint of its expected life, the fair',
37980:'value of an equivalent, newly constructed office building would have to be adjusted for the valueof the differenceinage or service',
37981:'potential. in addition, thefair value of the existing building may be higher than the replacement cost because the building can',
37982:'be put to alternative uses that produce greater benefits to the owner. 48. the relevance of replacement cost is high,',
37983:'especially for assessments of financial position and future resource needs. the level of understandability, reliability, and comparability across entities of',
37984:'reported replacement cost amounts may vary according to the data used and the complexity of the calculation. 49. reporting thereplacement',
37985:'cost of capital assetsusedinproviding services andrelatedservice costs can facilitate comparisons between program and activity costs and accomplishments related to the',
37986:'same period. an objectionsometimes raised isthat replacement cost is not an attribute of theasset that is actuallyowned. however, the asset',
37987:'being measured is not the physical asset but the services it can provide. 24. generally, replacement cost is the amount',
37988:'that a reporting entity would pay to replace the service potential of an existing asset at current transaction prices with',
37989:'a similar asset. replacement cost is different than reproduction cost. reproduction cost is the cost to construct an exact duplicate',
37990:'of the structure at todays cost. reproduction cost would result in reconstructing the itemasis, using manufacturing/construction techniques andstandards applicable at',
37991:'the time the asset and any modifications entered service. replacement cost using todays materials and standards is typically lower than',
37992:'reproduction cost, as reproduction of older methods today is less efficient and more expensive. 25. asexplainedinsffac7,areportingentitymustconsidertheremainingservicepotentialor age of the general',
37993:'pp&e to arrive at replacement cost. for example, the cost of a new item of pp&e could be adjusted by',
37994:'the equivalent of accumulated depreciation based on the remaining useful life compared to the original useful life to arrive at',
37995:'replacement cost. 26. under deemed cost, an effective managerial costing system that employs replacement cost information may be an acceptable',
37996:'source for replacement cost data. page 8 technical release 18 fasab handbook, version 20 06/21 technical release 18 plant replacement',
37997:'value7 oneacceptable replacement cost method forreal property 27. plantreplacementvalueprvrepresentsthecosttodesignandconstructanotionalfacility to current standards or to replace an existing facility at the',
37998:'same location. prv was developed to support largescale, programlevel estimates for planning purposes and is used in the federal real',
37999:'property profile frpp.8 while not previously used for financial reporting purposes, prv is used for decision making and management purposes.',
38000:'prv may be an appropriate starting point in establishing replacement cost for real property. figure 1: plant replacement value factors9',
38001:'28. prv is based on the factors identified in figure 1 above. the processes and methodology supporting the prv model',
38002:'should be documented and maintained. to perform the calculation, the facility quantity size or unit of measure, such as square',
38003:'footage needs to be obtained for the real property asset. the replacement unit cost factors are derived from multiple sources,',
38004:'such as governmentcontract awards and commercialestimating applications. area cost factors are developed based on local conditions affecting construction costs. actual',
38005:'contract award data may span multiple years due to the frequency of relevant awards. in collecting data for use in',
38006:'establishing area cost factors, timing issues will arise and some assets may take more than one year often several to',
38007:'plan, contract, and construct. therefore, averaging the data represents a tradeoff, but is acceptable. while more precision could be available,',
38008:'it might require a broader search for relevant cost data that may or may not enhance the resulting valuation. 29.',
38009:'prv also includes historical records adjustment; planning and design cost factors; supervision, inspection, and overhead cost factors; and contingency cost',
38010:'factors. because prv will lead to a replacement cost value, the asset characteristics and factors included in 7plant replacement valueprv',
38011:'may alsoserveas abasis toestablishestimatedhistorical cost. if so, adjustments for inflation/deflation may be appropriate. 8the frpp is a database of all',
38012:'real property under the custody and control of all executive branch agencies, except when otherwise required for reasons of national',
38013:'security. federal real property profile management system. accessed may 15, 2017. https://www.realpropertyprofile.gov/frppms/frpplogin. 9prv is not limited to the factors included',
38014:'in this figure and described in the following paragraphs. this is an example of one agencys model and factors. other',
38015:'agencies may have different factors. page 9 technical release 18 fasab handbook, version 20 06/21 technical release 18 the modeldo',
38016:'not contain all possible attributes and factorsassociated with the actual asset. as noted in sffac 7 par. 49, replacement cost',
38017:'is not an attribute of the actual asset; instead, it is the theoretical cost to replace the service potential embodied',
38018:'in the asset. close alignment of the physical characteristics of the actual asset and the theoretical replacement asset is therefore',
38019:'not critical to arrive at a reasonable value. 30. because of these inherent limitations, the prv associated with a particular',
38020:'real property asset may not be indicative of all of the specific features of that asset. in fact, the specific',
38021:'features of the asset may not be consistent with current building codes, materials, or methods. further, the specific characteristics of',
38022:'the asset may not be catalogued in sufficient detail to establish highly granular cost factors. 31. potentially acceptable forms of',
38023:'supporting documentation10 for prv11 or data elements include some or all of the following: a. a process to establish and',
38024:'verify the facility quantity b. geospatial data and space management systems c. maps with addresses or utilities d. plot plans,',
38025:'as built blueprints, plats, and other schematics serving as facilities management documentation for the assets in question e. state, city,',
38026:'and other municipality tax assessment documentation f. designation letter 32. prv is inclusive of capital improvements. for example, the primary',
38027:'sources of replacement unit costs are contract data and commercial estimating applications. some of these factors are not explicitly addressed',
38028:'in prv but are still embedded in the process. further, the replacementunit costs are intended to establish a notional amount',
38029:'for a large number of assets, rather than a specific asset. this representative amount is then applied to individual assets.',
38030:'33. if prv is used in establishing the opening balance for real property, then an adjustment for the difference in',
38031:'age between the existing asset and a replacement asset is required to 10the forms of documentation are not listed in',
38032:'any order of preference. they are examples and there may be others not included in this list. the list is',
38033:'not exhaustive. certain documentation would be more significant based on the prv formula or other factors, but such assessments require',
38034:'judgment. 11prv does not represent actual cost and is based on several factors that may be made up of different',
38035:'supporting documents, elements, and formulas. page 10 technical release 18 fasab handbook, version 20 06/21 technical release 18 arrive at',
38036:'replacement cost, per sffac 7, paragraph 47. this could be accomplished by recognizing accumulated depreciation based on the remaining useful',
38037:'life of the real property. alternatively, other methods could be used to adjust the prv for the difference between the',
38038:'remaining service potential of the asset and that of a new replacement asset. statistical methods of approximating the remaining service',
38039:'potential may provide a cost beneficial option for making such adjustments. this adjustment is unrelated to inflation or deflation since',
38040:'the acquisition of the existing asset. otheracceptable replacement cost methods for general property plant & equipment pp&e 34. there are',
38041:'several sources for current replacementcost amounts for general pp&e. potentially acceptable forms of supporting documentation12 for this method include the',
38042:'information obtained from the following sources, guides, or lists: a. published price listthe basic price of an item as published',
38043:'in a catalog, list price, or advertisement before any discounts are taken. if the price is reasonably current,13 it may',
38044:'be used to establish replacement cost. sources of price lists may include the following: i. the original equipment manufacturer ii.',
38045:'avendor involvedinthe manufactureofthesame or asimilar asset iii. federallogisticsdatafedlogpublishedbythedefenselogisticsagency fed log prices may also serve as a basis to establish estimated',
38046:'historical cost.14 12the forms of documentation are not listed in any order of preference. they are examples and there may',
38047:'be others not included on this list. 13reasonably current means that no material adjustments are required for changes in the',
38048:'general price level or for changes in specific prices. 14 fed log may be a potentially acceptable form of supporting',
38049:'documentation unless unit pricing updates based on recent acquisitions and/or cost of living inflation factors are lacking.assets listed in fed',
38050:'log will have a national stock number nsn or national item identification number. fed log prices may also serve as',
38051:'a basis to establish estimated historical cost. therefore, fed log is identified as a potentially acceptable form of supporting documentationunderthatdiscussion.',
38052:'insome situations, inactive acquisitions and older datamaybe indexed to derive estimated historical cost. in others, historicalcost information for certain types',
38053:'of assets lowvelocity items or major enditems suchas weapons systems or tanksare likely to cover only the base assetvalue and',
38054:'not include latercapital improvements or modifications. forexample,when a major modification is made to a weapons system,typically a new nsn is',
38055:'created to differentiate the new capability from the older item. for example, fed log most likely will have an nsn',
38056:'for anabrams m1a1 and a separate nsn for anabrams variant m1a2. therefore, flexibility must be allowed in determining if fed',
38057:'log can be used as replacement cost or estimating a reasonable historical cost. page 11 technical release 18 fasab handbook,',
38058:'version 20 06/21 technical release 18 iv. generalservicesadministrationschedule b. published industry price guideexamples of such price guides include the kelley',
38059:'blue book,aircraft blue book, nationalautomotive dealersassociation guides, and edmunds.com, which provide prices for the same or similar assets. c. values',
38060:'based on sales by the reporting entity of the same or similar assets to outside parties estimated historical cost initialamount',
38061:'35. areasonableestimateofhistoricalcostmaybebasedononeor more,or acombination,of the following methods: a. cost of the same or similar assets at the time of acquisition',
38062:'b. current cost of the same or similar assets discounted for inflation since the time of acquisition that is, deflating',
38063:'current costs to costs at the time of acquisition by general price index c. other reasonable estimation methods, including latest',
38064:'acquisition cost and estimation methods based on information such as, but not limited to, budget, appropriations, engineering documents, contracts, or',
38065:'other reports reflecting amounts to be expended 36. this list of reasonable estimates is not intended to establish any hierarchy',
38066:'of methodologies. as noted, reasonable estimates of historical cost do not require a precise measure of cost. materiality and cost',
38067:'should be considered when weighing the benefits of greater precision. 37. managementisresponsibleforestimatesincludedinthefinancialstatements. estimatesare based on both subjective and objective factors',
38068:'and, as a result, judgment is required to estimate opening balances. although reasonable estimates are applicable to any general pp&e,',
38069:'certain special considerations would be applied when establishing opening balances. the following is additional guidance that may assist in establishing',
38070:'opening balances based on a reasonable estimate of historical cost. 38. as noted, costbeneficial options are a major goal of',
38071:'sffas 50. estimating historical cost of an assetisnot thesameasrecreatingtheaccounting recordsthat would have been created had the reporting entity undertaken a',
38072:'gaapaccounting approach at the time the asset was acquired. sffas 50 is intended to avoid the expenditure of taxpayer dollars',
38073:'in recreating information that would have been of greater benefit in the past for example, to evaluate page 12 technical',
38074:'release 18 fasab handbook, version 20 06/21 technical release 18 major acquisition/construction programs as they were executed, but for which',
38075:'the informations current use is limited to accountability and assessing the cost of current services. 39. reporting entities must provide',
38076:'adequate supporting documentation appropriate for the deemedcost methodologyselected toestablish opening balances. sffas 50 andguidance clarified in this tr allows reporting',
38077:'entities flexibilities that should be considered when developing assumptions see the next section and documenting reasonable estimates of historical cost',
38078:'methodology. assumptions 40. assumptions are basic beliefs about the future operating and functional characteristics.15 for purposes of establishing opening balances',
38079:'of general pp&e, reasonable assumptions may be needed to make up for a lack of actual data. when reasonable assumptions',
38080:'are made, they should be documented and based on a consistent approach. reporting entities should ensure that the assumptions are',
38081:'reasonable in the context of the asset, and that the overall valuation is reasonable. 41. estimated historical cost is an',
38082:'estimate of the costs incurred to bring the pp&e to a form and location suitable for its intended use. sffas',
38083:'6, as amended, paragraph 26, provides examples of the costs that may be included. when management opts to use other',
38084:'reasonable estimation methods par. 35.c. above such as budget records to estimate historical cost, this list is relevant.16 42. manyoftheexamplessuchasdirectcostsofinspection,supervision,andadministrationof',
38085:'construction contracts and construction work would require managerial cost accounting systemsto calculate an appropriate capitalizable amount during the processof acquiring',
38086:'an asset. including such costsinestimated historicalcost would be especially challenging. the reporting entity may find that critical data elements are',
38087:'missing. for example, a reporting entity may utilize a contract for valuation of modifications even though the contract is missing',
38088:'one or more critical elements to allow for proper cost allocation. 43. the reporting entity should consider whether including all',
38089:'such costs is necessary or cost beneficial to arrive at a reasonable estimate. in doing so, the reporting entity may',
38090:'consider 15fasab handbook, version 15 06/16. 16note that deemed cost methods other than estimated historical cost inherently include costs such',
38091:'as the costs identified in this list. therefore, this list would not be relevant when management elects to apply methods',
38092:'identified at paragraphs 35.a. and 35.b. page 13 technical release 18 fasab handbook, version 20 06/21 technical release 18 whether',
38093:'comparable costs today are material. if material, management may elect to use current costaccounting information to estimate historical costs of',
38094:'a similar nature. for example, if inspection and supervision costs are approximatelysixpercent of contract costs today, then that may be',
38095:'a reasonable and costbeneficial assumption about past costs. 44. determinationofwhethertocapitalizeaparticularcostasacostofgeneralpp&eshouldbe based on general guidance in sffas 4, managerial cost accounting',
38096:'standards and concepts, and sffas 6, as amended. while these standards are imperative for the go forward approaches implemented, it',
38097:'is difficult to apply these approaches in establishing opening balances under the alternative methods. 45. forexample,sffas4providesthateachreportingentityshouldaccumulateandreportthe cost of its activities',
38098:'on a regular basis for managementinformation purposes and that costs should be assigned to outputs in one of the methods',
38099:'listed below in the order of preference: a. directly tracing costs wherever feasible and economically practicable b. assigning costs on',
38100:'a causeandeffect basis c. allocating costs on a reasonable and consistent basis 46. areportingentity eligibletoapplythe provisionsofsffas50hasnotbeenincompliance with sffas 4 or',
38101:'sffas 6 in the past. there may be little benefit in retrospectively establishing costassignment processes to capture indirect costs for',
38102:'the purpose of establishing opening balances. in addition, given that many assets may be near fully depreciated, there may be',
38103:'an argument to expense indirect costs based on materiality. these factors should be considered in developing the reasonable estimate. 47.',
38104:'the discussion below provides examples that are not required or expected of considerations that may be appropriate for a reasonable',
38105:'estimate of historical cost in establishing opening balances. the list below is not exhaustive and additional considerations even if not',
38106:'specifically identified in the list below may be necessary. 48. considerations that may be appropriate for a reasonable estimate of',
38107:'historical cost in establishing opening balances include the following: a. it is a reasonable estimate; it does not seek precision.',
38108:'b. materiality is a guiding factor in arriving at assumptions and the cost of more precise assumptions should be considered',
38109:'in relation to the materiality of their effect. page 14 technical release 18 fasab handbook, version 20 06/21 technical release',
38110:'18 c. multiple assumptions may be used to develop the reasonable estimate. this may include rates developed by other program',
38111:'offices, such as depot labor rates, maintenance, or other unique program rates that would be used for labor. d. whileconflictingdocumentationmayexistregardingaparticularitemofgeneralpp&e,',
38112:'the reasonablenessof the estimate should be based primarily on the method selected. for example, deflating the current cost of a',
38113:'similar asset may result in an estimate that differs from a reasonable estimate based on budget records. both estimates may',
38114:'be reasonable despite arriving at different amounts. the reporting entity is responsible for establishing a reasonable estimate, and it is',
38115:'not necessary to validate the estimate against alternative ways of arriving at it. the reporting entity should ensure its method',
38116:'is documented. e. the deemed cost approach does not anticipate that the full series of entries related to general pp&e',
38117:'be recreated. i. for example, it would not be cost effective or beneficial to expect reporting entities to apply the',
38118:'full cost standards as they would have been applied17 in establishing opening balances for general pp&e. 1. reporting entities may',
38119:'develop reasonable assumptions to determine the capitalizable portion of contract costs or pooled costs. an analysis of current contract costs,',
38120:'looking at the amount of capitalizable and noncapitalizable costs, mayprovidea reasonable proxyfor historical experience.an analysis mayprovide for a certain percentage',
38121:'or to capitalize all costs of certain programs. 2. reporting entities may develop reasonable assumptions or methodologies to determine the',
38122:'capitalizable indirect costs for programs.an analysis of a few select programsmaysupport that applying a set indirect rate to all remaining',
38123:'programs is reasonable. 17conditions remain that existed when fasab issued many of these standards, and the cost to implement all',
38124:'the standards concurrently is greater than would have been incurred if standards were implemented in a timely manner. the goal',
38125:'of sffas 50 was to avoid requiring the expenditure of taxpayer dollars in recreating information that would have been of',
38126:'greater benefit in the past for example, to evaluate major acquisition/construction programs as they were executed, but for which the',
38127:'current use is limited to accountability and assessing the cost of current services. the board proposed less costly alternatives that',
38128:'will support this objective. sffas 50, par. a6. page 15 technical release 18 fasab handbook, version 20 06/21 technical release',
38129:'18 documentation 49. traditional supporting documentation often was not available for legacy weapon programs. thereportingentitymayhavereliedonothersupportingdocumentationthatmayhavebeen subsequently removed from the acquisition',
38130:'and/or asset management processes. 50. for example, thirdpartydocumentation18 suchas congressional reports, costdocuments, websites devoted to military weapon systems, historical newspaper',
38131:'articles referencing government sources, and other information obtained on the internet and indexed appraisals may be considered acceptable. however, it',
38132:'is important that reporting entities document and maintain support for the data and assumptions used to develop reasonable estimates. 51.',
38133:'examples of potentially acceptable documentation are included under each reasonable estimate method. estimatesbudget based 52. the budget of the u.s.',
38134:'government commonly referred to as the presidents budget and related supporting documentation for a program or asset may have adequate',
38135:'detail to support a reasonable estimate. specifically, the budget detail provides visibility of the various cost estimates for the program',
38136:'or asset by year. to ensure the full program and funding amounts have been reviewed, the amounts should be reconciled',
38137:'and documented at the appropriation level with public laws and allocated to individual programs based on information provided in pertinent',
38138:'budgetary documents. examples of such budgetary documents may include the following:19 a. executive agency budget submission/request information b. congressional conference',
38139:'committee reports c. house and senate committee reports d. congressional budget requests 18the forms of documentation are not listed in',
38140:'any order of preference. they are examples and there may be others not included on this list. 19 the examples',
38141:'of budgetary documents are not listed in any order of preference. they are examples and there may be others not',
38142:'included on this list. page 16 technical release 18 fasab handbook, version 20 06/21 technical release 18 e. apportionment and',
38143:'reapportionment schedule sf132 forms and report on budget execution and budgetary resources sf133 forms f. other relevant documentation such as',
38144:'department of the treasury warrants, material supplemental appropriations, reprogramming, rescissions, transfers, or other budgetary documents that lead to a change',
38145:'in amount. 53. although this method is relatively straightforward for individual assets or those recently acquired, it is much more',
38146:'complex when considering program or weapon systems that include avarietyof assetsandspareparts, logistics, and support equipment. theprocessis compounded when the information',
38147:'relates to assets, systems, and programs that date over 20 years or more. 54. therefore, certain flexibilities should be afforded',
38148:'because reporting formats and information needs change over time. examples may include the following: a. budgetbased estimates may need to',
38149:'be reconciled to the documents listed in paragraph 52.a. f., if available, or to alternative documents. older assets such as',
38150:'assets acquired in 1990 or before and legacy systems may have different supporting documentation available.20 b. budget documents in a',
38151:'summary format do not preclude a budgetbased estimate; estimates may be made at the summary level when adequately explained. 55.',
38152:'potentially acceptable forms of documentation for this method include the following:21 a. budget justification materials and items discussed in paragraph',
38153:'52.a. f. b. appropriation data c. selected acquisition reports d. p1 documents and r1 documents 20reporting entities may use a',
38154:'selectedacquisition report, a congressionally mandated report for major weapon programs outlining budget projections. they may also use a p1 document,',
38155:'which provides a breakout of all procurement appropriations by line item and an r1 document, which provides a breakout of',
38156:'all research, development, test, and evaluation appropriations by program element. 21the forms of documentation are not listed in any order',
38157:'of preference. they are examples and there may be others not included on this list. page 17 technical release 18',
38158:'fasab handbook, version 20 06/21 technical release 18 e. program office analysis f. allocated per unit cost report g. technical',
38159:'specifications and estimates h. industry estimates reports of amounts to be expended i. fed log22 estimatescontract based 56. thebestcasescenarioisa conformedcontract',
38160:'providingalltheinformationavailablethat needs to be allocated to a particular asset, including all the modifications and delivery ordersassociated with the contract. however,',
38161:'this isnot normallythe case because coststo be capitalized are included in multiple contract line items and multiple contracts. this methodology',
38162:'involves valuing assets using the pricing data included in contracts.although challenging, reasonable estimates based on contracts are still permitted. 57.',
38163:'contracts contain specific contract line item numbers, which delineate specific production and nonproduction activities for example, materials, installation, proposal prep,',
38164:'spare parts.asnoted above, the determination of whether to capitalize a particular cost as a cost of general pp&e should be',
38165:'based on general guidance in sffas 4, and sffas 6, as amended. while these standards are imperative for the goforward',
38166:'approaches implemented,it isdifficult to applytheseapproachesinestablishingopeningbalancesunder the alternative methods. 58. potentially acceptable forms of documentation for this method include the following:23',
38167:'a. acquisition contracts b. time compliance and technical orders tctos c. comprehensive cost and requirement system reports d. program office',
38168:'delivery schedule 22see the fed log discussion on p. 10. 23the forms of documentation are not listed in any order',
38169:'of preference. they are examples and there may be others not included on this list. page 18 technical release 18',
38170:'fasab handbook, version 20 06/21 technical release 18 e. maintenance delivery schedule f. dd form250, material inspection and receiving report,',
38171:'and other receiving reports g. invoices h. program office analysis i. fed log24 estimatesengineering document based 59. detailed technical and',
38172:'engineering documents lay out the assumptions, materials, and estimated cost to produce an asset. in these instances, the engineering documents',
38173:'can provide a sufficient basis for estimating deemed cost for opening balances. 60. potentially acceptable forms of documentation for this',
38174:'method include the following:25 a. technical specifications and estimates b. maintenance delivery schedule c. bill of material d. invoices e.',
38175:'vendor quotes on material costs/sale rates f. tctos g. industry estimates h. fed log26 24see the fed log discussion on',
38176:'p. 10. 25the forms of documentation are not listed in any order of preference. they are examples and there may',
38177:'be others not included on this list. 26see the fed log discussion on p. 10. page 19 technical release 18',
38178:'fasab handbook, version 20 06/21 technical release 18 estimatedeflation of current cost 61. sffas 6, as amended, provides that general',
38179:'pp&e may be estimated based on current cost of the same or similar assets discounted for inflation since the time',
38180:'of acquisition that is, deflating current costs to costs at the time of acquisition by general price index. this method',
38181:'is appropriate when a series of similaritemsare being acquired over time and there is a reliable value for a base',
38182:'asset. 62. considerable flexibility is permitted within the framework as long as the method is properly indexed. for example, estimation',
38183:'may extend beyond current costs, provided it is properly indexed. it may be possible that the cost of a similar',
38184:'asset listed in a price guide two years before or after acquisition, properly indexed, is a reasonable estimate and likely',
38185:'more accurate than an indexed cost taken from a current price guide. 63. potentially acceptable forms of documentation for this',
38186:'method include the following:27 a. b. current cost of a similar asset appropriate pricing index to discount the current asset',
38187:'cost to its estimated cost at the time of acquisition i. consumer price index ii. other indices from the department',
38188:'of labors bureau of labor statistics c. fed log28 cost estimators29 64. incertaininstances,aninformedopinionofanexpertcostestimatormaybeusedtosupport reasonable estimates consistent with the provisions of',
38189:'sffas 50 and this tr. informed opinion refers to the judgment of others who make estimates based on their programmatic',
38190:'knowledge and/or experience without using a fully satisfactory information store and, in some cases, without using an econometric or other',
38191:'statistical model. if an expert cost estimator is used, the experts credentials or qualifications should be articulated and 27the forms',
38192:'of documentation are not listed in any order of preference. they are examples and there may be others not included',
38193:'on this list. 28see the fed log discussion on p. 10. 29cost estimators may also serve as a basis to',
38194:'establish fair value. therefore, cost estimators are identified as a potentially acceptable documentation under that discussion. page 20 technical release',
38195:'18 fasab handbook, version 20 06/21 technical release 18 documented in sufficient detail to allow review and validation by independent',
38196:'sources, including independent auditors. for example, reports and studies on relevant issues and other relevant communications describing the basis for',
38197:'any assumptions or changes in assumptions should be maintained in support of the experts opinion. 65. potentially acceptable forms of',
38198:'documentation for this method include the following:30 a. reports and studies b. memos with outside experts and minutes from internal',
38199:'meetings describing the basis for any assumptions or changes in assumptions c. previous studies conducted by the expert, including industry',
38200:'studies, journal articles, and thirdparty studies fair value 66. fair value is the amount at which an asset or liability',
38201:'could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.31 when determining',
38202:'the value of opening property balances, fair value is an acceptable valuation method to use in absence of actual cost',
38203:'data and associated supporting documents. 67. fasab has not developed detailed guidance regarding the approaches to use in establishing fair',
38204:'value. other standardssetters have provided guidance. for example, the governmentalaccounting standards board gasb issued statement no. 72, fair value measurement',
38205:'and application, which is summarized as follows: fair value is described as an exit price. fair value measurements assume a',
38206:'transaction takes place in a governments principal market, or a governments most advantageous market in the absence of a principal',
38207:'market. the fair value also should be measured assuming that general market participants would act in their economic best interest.',
38208:'fair value should not be adjusted for transaction costs. to determine a fair value measurement, a government should consider the',
38209:'unit of account of the asset or liability. the unit of account refers to the level at which an asset',
38210:'or a liability is aggregated or disaggregated for measurement, recognition, or disclosure purposes as provided by the accounting standards. forexample,',
38211:'the unit ofaccount for investments held in a brokerage account is each individual security, whereas the unit of account for',
38212:'an investment in a mutual fund is each share in the mutual fund held by a government. 30the forms of',
38213:'documentation are not listed in any order of preference. they are examples and there may be others not included on',
38214:'this list. 31sffac 7, par. 38. page 21 technical release 18 fasab handbook, version 20 06/21 technical release 18 this',
38215:'statement requires a government to use valuation techniques that are appropriate under the circumstances and for which sufficient data are',
38216:'available to measure fair value. the techniques should be consistent with one or more of the following approaches: the market',
38217:'approach, the cost approach, or the income approach. the market approach uses prices and other relevant information generated by market',
38218:'transactions involving identical or comparable assets, liabilities, or a group of assets and liabilities. the cost approach reflects the amount',
38219:'that would be required to replace the present service capacity of an asset. the income approach converts future amounts such',
38220:'as cash flows or income and expenses to a single current discounted amount. valuation techniques should be applied consistently,32 though',
38221:'a change may be appropriate in certain circumstances. valuation techniques maximize the use of relevant observable inputs and minimize the',
38222:'use of unobservable inputs. 68. sffas 6, as amended by sffas 50, permits use of fair value as one option',
38223:'for valuing opening balances and does not require that fair value be maintained through revaluation in the future. generally, where',
38224:'fair value is applied in other circumstances it is maintained as a current value and updated each reporting period. because',
38225:'sffas 50 seeks costeffective approaches to a onetime valuation, the reporting entity should use fair value approaches that are cost',
38226:'effective. the data available should be appropriate to the circumstances of establishing a costeffective opening balance for unique assets. 69.',
38227:'insuchcases,themarketsmaybeinherentlylimitedgiventheuniquenatureofgovernment assets, such as defense assets. in fact, manyassetsmaybe highlyspecialized, making fair value difficult to determine. for example, there may',
38228:'be few observable transactions and transactions may not be indicative of an active market between willing buyers and sellers. 70.',
38229:'70.for these reasons, and to afford use of fair value in a costeffective manner, opening balances at fair value may',
38230:'be determined based upon generally accepted approaches established by the gasb as well as a. market approaches where both the',
38231:'market and data are limited hereafter limited market approaches; b. cost estimators; and/or c. desktop appraisals. 32costbeneficial options are a',
38232:'major goal of sffas 50. the reporting entity may select any method; there is no preferred method among the methods',
38233:'permitted. the reporting entity should consider the reasonableness of the methodology selected and its relation to the available documentation. however,',
38234:'making comparisons among the methods or attemptingtoidentify themostcostbeneficial method would be inappropriate. management is notrequired to select the most precise',
38235:'or the best method. page 22 technical release 18 fasab handbook, version 20 06/21 technical release 18 71. limited market',
38236:'approaches may include transactions under the foreign military sales program, pricescharged forsalesbetweenfederalgovernment agencies, andother transfer programs for which reimbursement occurs.',
38237:'72. fair value can be established through an appraisal performed by an independent, qualified professional. the appraisalmust be performedin accordance',
38238:'with the uniformstandardsof professionalappraisal practice to be considered compliant. 73. although appraisals require the expenditure of resources, they may be',
38239:'justified for significant assetsor when multiple, or groupsof, assets can be appraised at the same time. 74. for the purpose',
38240:'of establishing deemed cost, desktop appraisals that do not require physical inspection of the assets are acceptable. mass appraisals, which',
38241:'leverage systematic procedures and statistical testing techniques to value multiple assets concurrently, are also acceptable for establishing deemed cost. 75.',
38242:'potentially acceptable forms of documentation for this method include the following:33 a. appraisal documents from qualified professionals b. methodology describing',
38243:'the fair value process c. documentation showing a recent sales transaction and amount for a similar asset in similar condition',
38244:'d. documentation showing a thirdparty sales price for a similar asset in similar condition e. documentation to support the cost',
38245:'estimator land rights 76. one alternative method permitted under sffas 50 is an exclusion of land and land rights from',
38246:'opening balances with disclosure of acreage information and expensing of future acquisitions. 77. reporting entities may elect to exclude land',
38247:'and land rights in establishing opening balances of general pp&e consistent with the alternative method established in sffas 6, 33the',
38248:'forms of documentation are not listed in any order of preference. they are examples and there may be others not',
38249:'included on this list. page 23 technical release 18 fasab handbook, version 20 06/21 technical release 18 as amended, par.',
38250:'40.f.i. it is important to consider what information should be disclosed regarding land rights. 78. sffas 6, as amended, states',
38251:'that a component reporting entity electing to exclude land and land rights from its general pp&e opening balances must disclose,',
38252:'with a referenceon the balance sheetto the related disclosure,the number of acres held at the beginning of each reporting period,',
38253:'the number of acres added during the period, the number of acres disposed of during the period, and the number',
38254:'of acres held at the end of each reporting period. areporting entity electing to exclude land and land rights from',
38255:'its general pp&e opening balance should continue to exclude future land and land rights acquisition amounts and provide the disclosures.',
38256:'sffas 6, as amended, par. 40.h.ii however, sffas 6, asamended, and thebasisforconclusionsfor sffas 50, acknowledge the diverse nature of land',
38257:'rights. sffas 6 acknowledges that some land rights may be depreciable or amortizable while othersare not. for example, land rightsfor',
38258:'a limited period of time are depreciated or amortized, whereas land rights that are permanent, such as with a deeded',
38259:'easement or right of way, are not. 79. the reporting entity should consider quantitative and qualitative criteria in determining if',
38260:'land rights disclosures of acreage are appropriate. areporting entity electing to exclude landrightsfromtheopeningbalancesandtoexpensesubsequentacquisitionsof landrights would disclose acreage when a land',
38261:'right provides control of acreage. generally, when a land right does not provide acreage to the entity that is, by',
38262:'allowing the entity to control specific acreage, there would be no acreage to disclose. therefore, there may not be land',
38263:'rights disclosures required by sffas 6, as amended, by sffas 50. 80. in addition, materiality is an overarching consideration in',
38264:'financial reporting. effective date 81. this tr is effective upon issuance. the provisions of this technical release need not be',
38265:'applied to immaterial items. page 24 technical release 18 fasab handbook, version 20 06/21 technical release 18 appendixa: basis for',
38266:'conclusions thisappendixdiscussessomefactorsconsideredsignificant bycommitteemembersin reaching the conclusions in thistechnical release. it includes the reasons for accepting certain approaches and rejecting others.',
38267:'individual members gave greater weight to some factors than to others. the guidance enunciated in this technical releasenot the material',
38268:'in this appendix should govern the accounting for specific transactions, events, or conditions. this technical release may be affected by',
38269:'later statements or other pronouncements. the handbook is updated annually and includes a status section directing the reader to any',
38270:'pronouncement that changed this technical release. within the text of the technical release, the guidance sections are updated for changes.',
38271:'however, this appendix will not be updated to reflect future changes. the reader can review the basis for conclusions of',
38272:'the amending statements or other pronouncements for the rationale for each amendment. project history and guidance a1. fasab issued sffas',
38273:'50, establishing opening balances for general property, plant, and equipment, onaugust 4, 2016, in response to dods request for guidance',
38274:'on establishing opening balances for general pp&e. a2. the alternative methods provided in sffas 50 are meant to be less',
38275:'costly options to implement gaap when establishing opening balances for general pp&e. a3. inaugust2016, theaccountingandauditingpolicycommitteeaapc or thecommittee approved two projects',
38276:'related to sffas 50. this guidance is a result of theaapcs second project to develop timely implementation guidance to assist',
38277:'with issues related to sffas 50.34 theaapcestablished ataskforce to assistindevelopingtheguidance.thetaskforce comprised subject matter experts from outside the federal government such',
38278:'as independent public accounting firms and consulting firms and inside the federal government such as chief financial officer staff and',
38279:'program office staff to ensure diverse perspectives were represented. a4. theaapctaskforcewas dividedintosubgroups generalpp&e, landrights,andbroad issues to assist fasab staff and',
38280:'expedite the identification of issues. the task force 34thefirst projectresulted in conformingamendments to existing trs. fasab issuedtr17, conforming amendments to',
38281:'technical releases for sffas 50, establishing opening balances for general property, plant, and equipment, in april 2017. page 25 technical',
38282:'release 18 fasab handbook, version 20 06/21 technical release 18 considered draft documents prepared by fasab staff. as a result',
38283:'of the task force input, fasab staff developed the implementation guidance presented in this tr. a5. this guidanceappliestoreportingentitieselectingto applysffas50. thistrprovides',
38284:'additional guidance to those reporting entities strictly in applying the alternative methods in establishing opening balances. a6. this implementation guidance',
38285:'assists in applying the alternative methods for opening balances and provides clarification on how the foundation and flexibility of sffas',
38286:'50 encourage reporting entities to consider costbenefit based on the availability of information or other practical considerations. it confirms that',
38287:'reporting entities may select any of the sffas 50 methods and there isno preferred method. management isnot required to select',
38288:'the most precise or best method. a7. this guidance explains the alternative valuation methods and describes the documentation that may',
38289:'be used to support the valuation as outlined in sffas 6, as amended. this tr does not provide guidance on',
38290:'the validation of existence and completeness of general pp&e. summary of outreach efforts and responses a8. theexposuredrafted, implementation guidance for',
38291:'establishing opening balances, was issued june 21, 2017, with comments requested by july 21, 2017. a9. upon release of the',
38292:'ed, fasab provided notices and press releases to the fasab subscription email list, the federal register, fasab news, the journal',
38293:'of accountancy, association of governmentaccountantstopics, the cpa journal, government executive, the cpa letter, the chief financial officers council, the council',
38294:'of the inspectors general on integrity and efficiency, and committees of professional associations generally commenting on eds in the past',
38295:'for example, the greater washington society of cpas and theassociation of governmentaccountants financial management standards board. a10.theaapc received sixresponsesfrom preparersand',
38296:'usersof federalfinancialinformation. the majority of respondents agreed with the proposals provided in the tr. a11.theaapc considered responses to the ed',
38297:'at itsaugust 17, 2017, public meeting. the aapc did not rely on the number in favor of or opposed to',
38298:'a given position. information about the respondents majority view is provided only as a means of summarizing the comments. theaapc',
38299:'considered the arguments in each response and weighed the merits of the points raised. page 26 technical release 18 fasab',
38300:'handbook, version 20 06/21 technical release 18 a12.of the six responses, four agreed with the proposals. specifically, the respondents agreed',
38301:'that the tr provides clear technical guidance, clarifies the flexibility intended in selecting among methods by sffas 50, and explains',
38302:'that management is not required to select the most precise or best method. two respondents neither agreed nor disagreed with',
38303:'the proposal. one respondent provided a letter indicating they had no comments. the other respondent provided editorial comments. a13.certain respondents',
38304:'provided suggestions and editorial comments. the respondents comments were carefully considered by the committee and several were adopted. aapc &',
38305:'boardapproval a14.the tr was approved by theaapc for release to fasab for issuance. the board has reviewed thistr and a',
38306:'majority of its members do not object to its issuance. written ballots are available for public inspection at the fasab',
38307:'office. page 27 technical release 18 fasab handbook, version 20 06/21 technical release 19: rescission of technical release 8 status',
38308:'issued effective date affects affected by january 15, 2019 effective upon issuance. tr 8 is rescinded. none. summary statement of',
38309:'federal financialaccounting standards sffas 55, amending interentity cost provisions, amended sffas 4, managerial cost accounting standards and concepts, and rescinded',
38310:'sffas 30, interentity cost implementation: amending sffas 4, managerial cost accounting standards and concepts, and interpretation 6, accounting for imputed',
38311:'intradepartmental costs: an interpretation of sffas no. 4. as a result, technical release tr 8, clarification of standards relating to',
38312:'interentity costs, is no longer consistent with sffas 4, as amended, because the requirement to recognize inter entity costs was',
38313:'revised significantly. this tr rescinds tr 8 because it is no longer consistent with sffas 4, as amended. the provisions',
38314:'of this tr need not be applied to immaterial items. the determination of whether an item is material depends on',
38315:'the degree to which omitting or misstating information about the itemmakesit probable that thejudgment of areasonablepersonrelying on theinformationwould have been',
38316:'changed or influenced by the omission or the misstatement. page 1 technical release 19 fasab handbook, version 20 06/21 technical',
38317:'release 19 table of contents page summary 1 technical guidance 3 scope 3 rescission of technical release 8, clarification of',
38318:'standards relating to interentity 3 costs effective date 3 appendixa:basis for conclusions 4 appendix b:abbreviations 9 page 2 technical release',
38319:'19 fasab handbook, version 20 06/21 technical release 19 technical guidance scope 1. readers of this technical release tr should',
38320:'first refer to the hierarchy of accounting standards in statement of federal financialaccounting standards sffas 34, the hierarchy of generally',
38321:'accepted accounting principles, including the application of standards issued by the financial accounting standards board. this tr supplements the relevant',
38322:'accounting standardsbut isnot a substitute for and does not take precedence over the standards. rescission of technical release 8, clarification',
38323:'of standards relating to interentity costs 2. thisparagraphrescindstr8, clarification of standards relating to interentity costs,in its entirety because it is',
38324:'no longer consistent with sffas 4, managerial cost accounting standards and concepts, as amended. effective date 3. this tr is',
38325:'effective upon issuance. the provisions of this technical release need not be applied to immaterial items. page 3 technical release',
38326:'19 fasab handbook, version 20 06/21 technical release 19 appendixa: basis for conclusions thisappendixdiscussessomefactorsconsideredsignificant bycommitteemembersin reaching the conclusions in thistechnical',
38327:'release. it includes the reasons for accepting certain approaches and rejecting others. individual members gave greater weight to some factors',
38328:'than to others. the guidance enunciated in this technical releasenot the material in this appendix should govern the accounting for',
38329:'specific transactions, events, or conditions. this technical release may be affected by later statements or other pronouncements. the handbook is',
38330:'updated annually and includes a status section directing the reader to any pronouncement that changed this technical release. within the',
38331:'text of the technical release, the guidance sections are updated for changes. however, this appendix will not be updated to',
38332:'reflect future changes. the reader can review the basis for conclusions of the amending statements or other pronouncements for the',
38333:'rationale for each amendment. project history a1. sffas 4 including interpretation 6, accounting for imputed intradepartmental costs: an interpretation of',
38334:'sffas no. 4, required reporting entities to recognize the full costs of services received from other federal reporting entities even',
38335:'if there was no requirement to reimburse the providing reporting entity for the full cost of such services. a2. thefederalaccountingstandardsadvisoryboardfasabissuedsffas55,',
38336:'amending interentity cost provisions, on may 31, 2018. this statement amended sffas 4 and rescinded sffas 30, interentity cost implementation:',
38337:'amending sffas 4, managerial cost accounting standards and concepts, and interpretation 6. a3. with the rescission of sffas 30, paragraphs',
38338:'110 and 111 of sffas 4, as amended, were restored to their original language prior to the issuance of sffas',
38339:'30. sffas 55 revised sffas 4 to provide for the continued recognition of significant interentity costs by businesstype activities. interentity',
38340:'costscontinue to be imputed for those reporting entities conducting businesstype activities1 because the information is directly tied to rates. a4.',
38341:'per sffas 4, as amended, recognition of interentity costs by activities that are not businesstype activities is not required with',
38342:'the exception of interentity costs for personnel 1businesstype activity is defined as a significantly selfsustaining activity that finances its continuing',
38343:'cycle of operations through collection of exchange revenue as defined in sffas 7, accounting for revenue and other financing sources',
38344:'and concepts for reconciling budgetary and financial accounting. page 4 technical release 19 fasab handbook, version 20 06/21 technical release',
38345:'19 benefits and the treasury judgment fund settlements unless otherwise directed by the office of management and budget omb. notwithstanding',
38346:'the absence of a requirement, nonbusinesstype activities may elect to recognize imputed cost and corresponding imputed financing for other types',
38347:'of interentity costs. rescission of tr 8, clarification of standards relating to interentity costs a5. this tr rescinds tr 8',
38348:'because it is no longer consistent with sffas 4, as amended. a6. rescinding tr 8 rescinds guidance that is not',
38349:'in accordance with generally accepted accounting principles gaap due to sffas 55 amendments. for example, tr 8 does not reflect',
38350:'that recognition of interentity costs by activities that are not businesstype activities is not required with the exception of interentity',
38351:'costs for personnel benefits and the treasury judgment fund settlements unless otherwise directed by omb. however, nonbusiness type activities may',
38352:'elect to recognize imputed cost and corresponding imputed financing for other types of interentity costs. a7. this tr also eliminates',
38353:'potentially confusing references to the rescinded sffas 30. the accounting andauditing policy committee aapc or the committee believes it appropriate',
38354:'to rescind tr 8 because allowing it to remain is inconsistent with current gaap and may lead to potential misapplication',
38355:'of the technical guidance. for example, paragraph 7 the first paragraph under the technical guidance section of tr 8 states:',
38356:'this guidance is presented in response to three implementation issues identified by fasab based on comments sffas 30 received from',
38357:'respondents. with sffas 30 being rescinded, allowing tr 8 to remain in effect could bring questions as to its applicability.',
38358:'a8. considering the changes that have occurred in the accounting for interentity costs, the committees goal was to update tr',
38359:'8 to ensure clear guidance going forward. the committee carefully considered if any guidance should be maintained and if any',
38360:'additional guidance was necessary. paragraph 111 of sffas 4, as amended, states: recognition of all significant interentity costs is important',
38361:'when those costs constitute inputs to government goods or services provided for a fee or user charge. generally, the fees',
38362:'and user charges should recover the full costs of those goods and services. [footnote 33 omitted] thus, the cost of',
38363:'interentity goods or services needs to be recognized by the receiving entity in order to determine fees or user charges',
38364:'for goods and services sold by the federal government. recognitionofinterentitycosts supportingbusinesstype activities [footnote33aomitted] andrecognition of interentitycostsfornonbusinesstypeactivitiesthatelect todo so should be',
38365:'made in accordance with implementation guidance provided by page 5 technical release 19 fasab handbook, version 20 06/21 technical release',
38366:'19 fasab through one or more technical releases.33b activities that are not businesstype activities are not required to recognize interentity',
38367:'costs other than interentity costs for personnel benefits and the treasury judgment fund settlements unless otherwise directed by omb. notwithstanding',
38368:'the absence of a requirement, nonbusinesstype activities may elect to recognize imputed cost and corresponding imputed financing for other types',
38369:'of interentity costs. 33btechnical release tr 8, clarification of standards relating to interentity costs provides implementation guidance. additional trs may',
38370:'be provided by fasab if needed. a9. the committee believes that much of the guidance that was previously included in',
38371:'tr 8 is no longer necessary or relevant based on the amended standards. the purpose of tr 8 was to',
38372:'provide guidance in response to concerns raised during due process of sffas 30. tr 8 addresses three aspects of full',
38373:'costing specified in sffas 4: 1 guidance on costs that should be considered broad and general for all entities, 2',
38374:'guidance on the directness of the relationship tothe entitysoperationsasused indeterminingifa transaction should be considered material to the receiving entity, and',
38375:'3 guidance on identifiability as used in determining if a transaction should be considered material to the receiving entity. a10.the',
38376:'committee determined that the list of broad and general support goods and services that was provided in table 1 of',
38377:'tr 8 is not necessary to maintain. while the list was helpful to the community when tr 8 was issued',
38378:'in 2008, the committee believes the conclusions presented in the list are now well established and do not need to',
38379:'be included in any form of updated guidance. table 1 provided the following examples, which appear to be widely understood',
38380:'in the community today as broad and general support goods and services: a. department of the treasury services, such as',
38381:'disbursing electronic funds transfer and check payments, governmentwide accounting and reporting policy and guidance, collection services, and trust fund maintenance',
38382:'b. department of justice services, such as debt collection activities and nonreimbursed services for criminal and civil litigation c. general',
38383:'services administration services, such as real and personal property disposal and central management functions d. department of labor services, such',
38384:'as administration of unemployment compensation and nonreimbursable administration and support services for the federal employees compensation account e. office of',
38385:'personnel management services, such as administration of the federal employees benefit program including pensions and postretirement benefits page 6 technical',
38386:'release 19 fasab handbook, version 20 06/21 technical release 19 f. executive office of the president, including all support functions',
38387:'performed g. governmentaccountabilityoffice,suchasaccountingandauditingpolicyandguidance a11.when considering the need for guidance on the directness of a relationship to an entitys operations, tr',
38388:'8 included specific excerpts from respondents to sffas 30, which has now been rescinded. in addition, the guidance included excerpts',
38389:'from sffas 4 as well as paraphrases from the managerial costaccounting concepts and basis for conclusions sectionsthat reiterated keypoints. whileimportant,',
38390:'the committee determined the following tr 8 topics discussed key points that reside in sffas 4, as amended, and do',
38391:'not need to be included in any form of updated guidance: a. the directness of the relationship to entity operations',
38392:'is generally determined by matching goods or services received to the output of the entity. b. managerial cost accounting should',
38393:'be performed to measure and report the costs of each responsibility segment levels output. c. the needs of the users',
38394:'of cost information must be taken into account. a12.the committee found that the majority of the explanations on identifiability included',
38395:'direct excerpts and paraphrases from the managerial costaccounting concepts and basis for conclusions sections from sffas 4. the guidance in',
38396:'tr 8 related to the requirement for the provider to supplythe receivingentity with information on the full cost of nonreimbursed',
38397:'or underreimbursed interentity goods and services. the committee believes this requirement and the requirements when information is not provided are',
38398:'well understood by the community. therefore, this does not need to be included in any form of updated guidance. a13.in',
38399:'summary, the committee believes that, while the guidance was useful during initial implementation of sffas 30, it is no longer',
38400:'necessary. much of the guidance provided in tr 8 is now understood by the community. further, portions of tr 8',
38401:'reiterated key points from sffas 4 and quoted it directly. otherportions of tr8 contained paraphrases from the managerial costaccounting concepts',
38402:'and basis for conclusions sections of sffas 4 that are still included within sffas 4. for example, including excerpts from',
38403:'sffas 4 issued in 1995 is not practical or useful considering sffas 4 is available for reference. the committee believes',
38404:'all necessary guidance resides in sffas 4, as amended. page 7 technical release 19 fasab handbook, version 20 06/21 technical',
38405:'release 19 summary of outreach efforts and responses a14.the exposure draft ed, rescission of technical release 8, was issuedaugust 21,',
38406:'2018, with comments requested by october 5, 2018. a15.upon release of the ed, fasab provided notices and press releases to',
38407:'the fasab subscription email list, the federal register, fasab news, the journal of accountancy, association of governmentaccountantstopics, the cpa journal,',
38408:'government executive, the cpa letter, the chief financial officers council, the council of the inspectors general on integrity and efficiency,',
38409:'and committees of professional associations generally commenting on eds in the past for example, the greater washington society of cpas',
38410:'and theassociation of governmentaccountants financial management standards board. a16.theaapc received nine responses from preparers, users of federal financial information, and',
38411:'professional associations. a17.theaapc considered responses to the ed at its november 27, 2018, public meeting. the aapc did not rely',
38412:'on the number in favor of or opposed to a given position. information about the respondents majority view is provided',
38413:'only as a means of summarizing the comments. theaapc considered the arguments in each response and weighed the merits of',
38414:'the points raised. a18.all respondents supported the proposal to rescind tr 8, clarification of standards relating to interentity costs, because',
38415:'it is no longer consistent with sffas 4, as amended. aapc & boardapproval a19.the tr was approved by theaapc for',
38416:'release to fasab for issuance. the board has reviewed thistr and a majority of its members do not object to',
38417:'its issuance. written ballots are available for public inspection at the fasab office. page 8 technical release 19 fasab handbook,',
38418:'version 20 06/21 technical release 19 appendix b:abbreviations aapc accounting and auditing policy committee ed exposure draft fasab federalaccounting standardsadvisory',
38419:'board gaap generallyaccepted accounting principles omb office of management and budget sffas statement of federal financialaccounting standards tr technical release',
38420:'page 9 technical release 19 fasab handbook, version 20 06/21 staff implementation guidance 23.1: guidance for implementation of sffas 23,',
38421:'eliminating the categorynational defense property, plant, and equipment: classification of items formerly considered national defense pp&e status issued effective date',
38422:'affects affected by january 31, 2005 effective upon issuance. sffas 23 none. summary the implementation guidance resolves an inconsistency between',
38423:'the implementation guidance provided in sffas 23 and definitions in existing standards. page 1 sig 23.1 fasab handbook, version 20',
38424:'06/21 sig 23.1 table of contents page summary 1 background 3 effective date 4 page 2 sig 23.1 fasab handbook,',
38425:'version 20 06/21 sig 23.1 background 1. statementoffederalfinancialaccountingstandardssffas23, eliminating the category national defense property, plant, and equipment, rescinded sffas 11,',
38426:'amendments to accounting for property, plant, and equipment definitional changes in its entirety. sffas 11 established the definition of national',
38427:'defense property, plant, and equipment nd pp&e. its rescission eliminated the category nd pp&e along with the definition for that',
38428:'term. implementing guidance contained in sffas 23 provides that: 10. the initial capitalization amount for assets previously considered nd pp&e',
38429:'should be based on historical cost in accordance with the asset recognition provisions of sffas no. 6 [accounting for property,',
38430:'plant, and equipment], as amended, and should be the initial historical cost for the items, including any major improvements or',
38431:'modifications. emphasis added. 2. the above text suggests that all items formerly considered nd pp&e should be classified as pp&e.',
38432:'in addition, par. ii of sffas 23 provides that “all items previously considered nd pp&e are classified as general pp&e.”',
38433:'par. 6b of sffas 23 also refers to classification as general pp&e. staff implementation guidance 3. q: should par. 10',
38434:'of sffas 23 limit the classification of items previously considered nd pp&e to general pp&e? 4. a:no.areasonableapproachwouldbetosubordinatesffas23’sgeneralimplementation guidance to the',
38435:'definitions in accounting standards. that is, assets being recognized due to the implementation of sffas 23 should be categorized in',
38436:'accordance with asset definitions in sffas 6 and other accounting standards. 5. q: sffas 23 implementation guidance describes acceptable approaches',
38437:'to valuing those items of nd pp&e to be classified as general pp&e. how should items of nd pp&e not',
38438:'classified as general pp&e be valued? 6. a:anyitems notproperlyclassifiedasgeneralpp&e shouldbevaluedinamanner consistent with the general principles established in sffas 23 implementation',
38439:'guidance and the specific measurement guidance provided in accounting standards for the relevant asset class. page 3 sig 23.1 fasab',
38440:'handbook, version 20 06/21 sig 23.1 basis for conclusions 7. aliteralapplicationofsffas23,par. 10wouldresultindefactoamendmentstothepp&e definition contained in sffas 6 and any asset',
38441:'definitions promulgated by other standards. that is, all asset definitions other than general pp&e would have to exclude nd pp&e',
38442:'and the general pp&e definition would have to include nd pp&e. 8. consequences of reading the implementation guidance as amending',
38443:'the definitions remaining in current standards include: a. inconsistency in classification of assets between the components of the department of',
38444:'defense and all other federal entities, b. possible inconsistent accounting for the items subject to implementation guidance in sffas 23',
38445:'and items acquired in the future by the department of defense, and c. reliance on a definition that has been',
38446:'purged from authoritative publications such as the original pronouncements volume. 9. staff implementation guidance resolves the inconsistency between the definitions',
38447:'and the implementation guidance by subordinating par. 10 of sffas 23 to asset definitions in accounting standards. effective date 10.',
38448:'this guidance is effective upon issuance. the provisions of this staff implementation guidance need not be applied to immaterial items.',
38449:'page 4 sig 23.1 fasab handbook, version 20 06/21 staff implementation guidance 31.1: guidance for implementation of sffas 31, accounting',
38450:'for fiduciary activities status issued effective date affects affected by march 19, 2009 effective upon issuance. sffas 31 none. summary',
38451:'this implementationguidance addressesquestions on implementation of sffas 31, accounting for fiduciary activities that were raised by federal preparers. page 1',
38452:'sig 31.1 fasab handbook, version 20 06/21 sig 31.1 table of contents summary 1 background 3 staff implementation guidance 3',
38453:'effective date 12 basis for conclusions 12 page 2 sig 31.1 fasab handbook, version 20 06/21 sig 31.1 background 1.',
38454:'after the issuanceofstatementoffederalfinancialaccountingstandards sffas31, federal preparers had questions about its implementation. the below staff implementation guidance sig q&as address questions',
38455:'that were raised by federal preparers. 2. sigdoesnotestablishnewrequirements. rather,sigisintendedtoassistpreparersinthe application of fasab literature. staff implementation guidance 3. q 1: do',
38456:'the requirements of statement of federal financial accounting standards sffas 31 extend to all reports required by law or administrative',
38457:'action? 4. no. sffas 31 explains the scope of the standards as follows: sffas 31 [8] this statement provides financial',
38458:'reporting standards for fiduciary activities in the general purpose financial statements for federal entities. the standard does not affect reporting',
38459:'in the budget of the united states or specialpurpose reports. 5. accordingly, sffas 31 does not apply to a reports',
38460:'such as standalone audited financial statements that are prepared under an other comprehensive basis of accounting which may be considered',
38461:'special purpose reports or b individual statements provided to beneficiaries. 6. with respect to individual statements to beneficiaries, some have',
38462:'suggested that the sffas 31 disclosures should be based on information prepared at the beneficiary ownership level and aggregated for',
38463:'the component entity. component entities using this approach would develop and report accrual basis information for the individual beneficiary. the',
38464:'board does not intend that this approach be required. rather, the board intends the accrual of fiduciary activities to be',
38465:'implemented in a costeffective manner. therefore, a single aggregate accrual that supports information presented in the schedule of net assets',
38466:'and fiduciary activity in a note to the financial statements should be considered. this approach would support the disclosures required',
38467:'by sffas 31 in a costeffective manner. 7. q 2: may component entities aggregate fiduciary activities for disclosure purposes? page',
38468:'3 sig 31.1 fasab handbook, version 20 06/21 sig 31.1 8. yes. further, discretion is permitted in selecting activities to',
38469:'be presented individually. 9. sffas 31 provides: sffas 31 [20] for component entities with several distinct fiduciary activities, summary financial',
38470:'information required in paragraph 18 should be provided for each fiduciary activity presented individually. information for fiduciary activities not presented',
38471:'individually see paragraph 21 may be aggregated. [21] selecting fiduciary activities to be presented individually requires judgment. the preparer should',
38472:'consider both quantitative and qualitativecriteria. acceptablecriteriaincludebutarenotlimitedto: quantitative factors such as the percentage of the reporting entitys fiduciary net assets or',
38473:'inflows; and qualitative factors such as whethera fiduciaryactivityisofimmediateconcerntobeneficiaries, whether it is politically sensitive or controversial, whether it is accumulating large',
38474:'balances, or whether the information provided in the fiduciary note disclosure would be the primary source of financial information for',
38475:'the public. 10. paragraph 20 of sffas 31 identifies the summary financial information that should be provided for each fiduciary',
38476:'activity presented individually and explains that this financial information should be presented as aggregated for all activities not presented individually.',
38477:'paragraph 21 of sffas 31 recognizes that judgment should be exercised in deciding if any fiduciary activities should be presented',
38478:'individually. for example, subject to the considerations in paragraphs 20 and 21, an entity might present summary financial information for:',
38479:'a. all fiduciary activities in aggregate, b. fiduciary activities aggregated by type of activity such as leasing or investing activity,',
38480:'c. classes1 of beneficiaries separately as individual fiduciary activities, or 1beneficiaries may belong to a class if they are 1',
38481:'served by the same system or program office, 2 share certain traits or characteristics e.g., local governments, or 3 both.',
38482:'page 4 sig 31.1 fasab handbook, version 20 06/21 sig 31.1 d. fiduciary activities conducted by individual program offices. 11.',
38483:'theentity maypresentsimply totalfiduciaryfunds asasingle column. alternatively, the entitymaypresenttheinformationbyprogramofficetofacilitateperformancemeasurement. yet another option is to present information by class of beneficiary. 12.',
38484:'q 3: in some cases several bureaus within an agency or department perform activities that result in fiduciary balances that',
38485:'are distributed by another bureau of the agency. should each bureau include fiduciary activities disclosures in its stand alone audited',
38486:'financial statements? 13. if the activity meets the definition of fiduciary activity it should be disclosed as such in each',
38487:'bureaus stand alone audited financial statements. see paragraph 5 of this document for clarification regarding special purpose reports. 14. per',
38488:'sffas 31, par. 10, in a fiduciary activity a federal entity collects or receives and subsequently manages, protects, accounts for,',
38489:'invests, and/or disposes of cash or other assets in which nonfederal individuals or entities or nonfederal parties have an ownership',
38490:'interest2 that the federal government must uphold. 15. for an activity to meet the definition of a fiduciary activity, the',
38491:'federal entity has to: a. collect and receive fiduciary cash or other assets and subsequently b. perform one or more',
38492:'of the other activities identified in the definition manage, protect, account for, invest, and/or dispose of the fiduciary cash or',
38493:'other assets. 16. q 4: in some cases, beneficiaries may direct third parties to make payments to a federal agency',
38494:'for credit to the beneficiaries account. for example, the beneficiary may hold assets outside the trust and elect to liquidate',
38495:'the assets and have the proceedsdeposited in thetrust.at whatpointdoesthis activity resultin an asset that qualifies for disclosure as fiduciary activity?',
38496:'17. the role of the federal entity must be understood in order to determine the extent of the fiduciary disclosure',
38497:'requirement in sffas 31. in some cases, there is no fiduciary or trust asset until an actual deposit is received.',
38498:'if, for example, the federal component entity has no collection responsibilities but merely receives funds directed to the entity by',
38499:'the 2theownershipinterest must beenforceable against the federal government. judicial remedies must be available for the breach of the fiduciary obligation.',
38500:'sffas 31, par. 10 page 5 sig 31.1 fasab handbook, version 20 06/21 sig 31.1 beneficiary,there isno accountreceivable. instead, theentitywouldbecomeresponsiblefor',
38501:'disclosing cash only after a deposit is made. 18. q 5: is there any requirement to report fiduciary assets, liabilities',
38502:'or flows when the federal entity does not perform any of the fiduciary activities listed in the definition, but does',
38503:'provide other services, such as advisory services that may lead to a contract being executed outside of the federal government,',
38504:'with no further federal role? 19. no. certain activities that support beneficiaries may not lead to the creation of fiduciary',
38505:'or trust assets. 20. per sffas 31, par. 10, in a fiduciary activity a federal entity collects or receives and',
38506:'subsequently manages, protects, accounts for, invests, and/or disposes of cash or other assets in which nonfederal individuals or entities or',
38507:'nonfederal parties have an ownership interest that the federal government must uphold. 21. for an activity to meet the definition',
38508:'of a fiduciary activity, the federal entity has to: a. collect and receive fiduciary cash or other assets and b.',
38509:'subsequently perform one or more of the other activities identified in the definition manage, protect, account for, invest, and/or dispose',
38510:'of the fiduciary cash or other assets. 22. q 6: in some cases, courts may direct third parties to make',
38511:'payments to an escrow account in a commercial bank to be distributed to harmed parties. the escrow accounts are not',
38512:'the property of the federal government, and the interest income is subject to taxes. in some of these cases, a',
38513:'federal agency may have some control over disbursements e.g., by approving or disapproving a thirdparty distribution plan. does this situation',
38514:'meet the definition of fiduciary activity in sffas 31? 23. no. in this example, the federal agency has not received',
38515:'or collected the cash or other assets. 24. the definition of fiduciary activities is stated in sffas 31, par. 10:',
38516:'in a fiduciary activity a federal entity collects or receives and subsequently manages, protects,accountsfor,invests,and/ordisposesofcash orotherassetsin whichnonfederal individuals or entities or',
38517:'nonfederal parties have an ownership interest that the federal government must uphold. nonfederal parties must have an ownership interest in',
38518:'cash or other assets held by the federal entity under provision of law, regulation, or other fiduciary page 6 sig',
38519:'31.1 fasab handbook, version 20 06/21 sig 31.1 arrangement. the ownership interest must be enforceable against the federal government. judicial',
38520:'remedies must be available for the breach of the fiduciary obligation. 25. q 7: does sffas 31 require reporting the',
38521:'monetary value of fiduciary land held in trust? 26. the reporting requirements for nonvalued fiduciary assets are found in paragraph',
38522:'18d of sffas 31: bold added sffas 31 [18d] componententitiesalsomayhavenonvaluedfiduciaryassets. nonvalued fiduciary assets are fiduciary assets for which required disclosure',
38523:'does not include dollar values. nonvalued fiduciary assets may include land held in trust. component entities holding nonvalued fiduciary assets',
38524:'should disclose them in a schedule of changes in nonvalued fiduciaryassets, which should include a description of nonvalued fiduciary assets,',
38525:'beginning quantity, quantity received, quantity disposed of, net increase/decrease in nonvalued fiduciary assets, and ending total quantity. 27. under federal',
38526:'accounting standards, the vast majority of land will be classified as a non valued asset. 28. q: 8: how should',
38527:'the concept of materiality be applied to disclosures about fiduciary activities? page 7 sig 31.1 fasab handbook, version 20 06/21',
38528:'sig 31.1 29. the boards position on materiality is published in the foreword to original pronouncements, volume 1, available on',
38529:'the fasab website at: https://fasab.gov/accountingstandards/documentbychapter/ [foreword, fasab original pronouncements] materiality the board intends that all standardsapplication be limited to items',
38530:'that are material. materiality has not been strictly defined in the accounting community; rather, it has been a matter of',
38531:'judgment on the part of preparers of financial statements and the auditors who attestto them. presented below isthe boardsposition on',
38532:'the issue of materiality at this time. the accounting and reporting provisions of the boards accounting standards need not be',
38533:'applied to immaterial items. the determinationofwhetheranitemisimmaterialrequirestheexercise of considerable judgment, based on consideration of specific facts and circumstances. 30. additional guidance',
38534:'on materiality is provided in sffac 2, sffas 1, sffas 3, and the american institute of certified publicaccountants aicpa code',
38535:'of professional conduct. page 8 sig 31.1 fasab handbook, version 20 06/21 sig 31.1 sffac 2 [78] someofareportingentityscomponentsarelikelytoberequiredby law or',
38536:'policy to prepare and issue financial statements in accordance with accounting standards other than those recommended by fasab and issued',
38537:'by omb and gao3, e.g., accountingstandardsissuedbythefinancialaccountingstandards board or accounting standards established by a regulatory agency. those components should continue to',
38538:'issue the required reports. the reporting entities ofwhich the componentsare a partcan issue consolidated, consolidating, or combining statements that include',
38539:'the components financial information prepared in accordance with the other accounting standards. they need to be sensitive, however, to differences',
38540:'resulting from applying different accounting standards that could be material to the users of the reporting entitys financial statements. if',
38541:'these differences are material, the standards recommended by fasab and issued by omb and gao should be applied. the components',
38542:'would need to provide any additional disclosuresrecommended byfasab and included in the ombissued standards that would not be required by',
38543:'the other standards. 3 note:after october 1999, fasab issues standards absent an objection from the office of management and budget',
38544:'omb or the governmentaccountability office gao. page 9 sig 31.1 fasab handbook, version 20 06/21 sig 31.1 sffas 1 [12]',
38545:'exceptasotherwisenoted,theaccountingandreportingprovisions of the accounting standards recommended in this statement need not be applied to items that are qualitatively and quantitatively',
38546:'immaterial. [13] the determination of whether an item is material depends on the degree to which omitting or misstating information',
38547:'about the item makes it probable that the judgmentof a reasonable person relying on the information would have been changed',
38548:'or influenced by the omission or the misstatement. sffas 3 [8] the accounting and reporting provisions of the boards accounting',
38549:'standards need not be applied to immaterial items. the determinationofwhetheranitemisimmaterialrequirestheexercise of considerable judgment, based on consideration of specific facts and',
38550:'circumstances. [9] fasbsstatementofaccountingconcepts no. 2, qualitative characteristics ofaccounting information, discusses the concept of materiality. according to this statement, the determination',
38551:'of whether an item is material depends on the degree to which omitting or misstating information about this item makes',
38552:'it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by',
38553:'the omission or the misstatement. this concept includes both qualitative and quantitativeconsiderations. anitemthatisnotconsideredmaterial from a quantitative standpoint may be considered',
38554:'material if it would influence or change the judgment of the financial statement user. 31. in addition,theaicpacode ofprofessionalconduct,rule203states bold added:',
38555:'page 10 sig 31.1 fasab handbook, version 20 06/21 sig 31.1 aicpa rule 203 accounting principles amember shall not 1',
38556:'express an opinion or state affirmatively that the financial statements or other financial data of any entity are presented in',
38557:'conformity with generally accepted accounting principles or 2 state that he or she is not aware of any material modifications',
38558:'that should be made to such statements or data in order for them to be in conformity with generally accepted',
38559:'accounting principles, if such statements or data contain any departure from an accounting principle promulgated by bodies designated by council',
38560:'to establish such principles that has a material effect on the statements or data taken as a whole. if, however,',
38561:'the statements or data contain such a departure and the member can demonstrate that due to unusual circumstances the financialstatementsordatawouldotherwisehavebeenmisleading,',
38562:'the member can comply with the rule by describing the departure, its approximate effects, if practicable, and the reasons why',
38563:'compliance with the principle would result in a misleading statement. materiality with respect to fiduciary disclosures should be based on',
38564:'professional judgment considering relevant qualitative and quantitativefactors.examplesofquantitativefactorsincludebutare not limited to the relationship of fiduciary amounts to other appropriate information in',
38565:'the entitys principal financial statements including disclosures. for example, the quantitative materiality determination for each fiduciary item could be made',
38566:'based on the significance of those amounts to amounts recognized on the principal financial statements of the reporting entity, and/or',
38567:'on the significance of an individual item within the fiduciary amounts to all fiduciary amounts presented by the reporting entity.',
38568:'in all cases, qualitative materiality aspects should be appropriately considered. 32. q 9: may estimating techniques be used when reporting',
38569:'fiduciary disclosures? page 11 sig 31.1 fasab handbook, version 20 06/21 sig 31.1 33. yes,estimatingtechniquesmaybeusedwhenreportingfiduciarydisclosures. forexample, accrual estimates may be',
38570:'developed and reported on a summary level. 34. when estimates are used for summary information for fiduciary activities, the fiduciary',
38571:'note may include disclosure of the use of estimates and explain that the actual results may vary from the estimates',
38572:'reported. effective date 35. this guidance is effective upon issuance. the provisions of this staff implementation guidance need not be',
38573:'applied to immaterial items. basis for conclusions a1. after the issuance of sffas 31, several federal agencies had questions about',
38574:'its implementation. staff drafted an initial draft sig based upon questions from agencies and hosted a public meeting to discuss',
38575:'the draft. a2. revised draft sig was posted for public comment for the required twoweek comment period. seven comment letters',
38576:'were received. six comment letters were from federal preparers and one was from a nonfederal professional organization. based upon comments',
38577:'received, staff drafted revised sig and forwarded it to the board on march 3, 2009 for a 15day review period.',
38578:'the final sig was issued on march 19, 2009. page 12 sig 31.1 fasab handbook, version 20 06/21 staff implementation',
38579:'guidance 6.1: clarification of paragraphs 4041 of sffas 6, accounting for property, plant, and equipment, as amended status issued effective',
38580:'date affects affected by july 17, 2018 effective upon issuance. sffas 6, par. 4041 none. summary this guidance addresses implementation',
38581:'guidance provided in statement of federal financial accounting standards sffas 6, accounting for property, plant, and equipment, as amended. specifically,',
38582:'it responds to a question raised since the issuance of sffas 50, establishing opening balances for general property, plant, and',
38583:'equipment: amending statement of federal financial accounting standards sffas 6, sffas 10, sffas 23, and rescinding sffas 35. page 1',
38584:'sig 6.1 fasab handbook, version 20 06/21 sig 6.1 table of contents summary 1 introduction 3 technical guidance 3 effective',
38585:'date 4 basis for conclusions 5 page 2 sig 6.1 fasab handbook, version 20 06/21 sig 6.1 introduction 1. after',
38586:'the issuanceofstatementoffederalfinancialaccountingstandards sffas50, establishing opening balances for general property, plant, and equipment: amending statement of federal financial accounting standards sffas',
38587:'6, sffas 10, sffas 23, and rescinding sffas 35, federalaccounting standardsadvisory board fasab or the board staff identified certain necessary',
38588:'clarifications1 regarding whether both of the alternative methods for establishing opening balances and the alternative for estimated net remaining costperthe',
38589:'secondsentenceinparagraph 41ofsffas6,asamended, couldbe applied. 2. thebelowstaffimplementationguidancesigq&aaddressesthequestionraisedbythe department of defense dod. sig does not establish new requirements. rather, sig is intended',
38590:'to assist preparers in the application of fasab literature. technical guidance 3. q1: can both of the alternative methods for',
38591:'establishing opening balances provided by paragraph 40 of sffas 6, as amended, and the alternative to record property, plant, and',
38592:'equipment pp&e at its estimated net remaining cost provided by paragraph 41 of sffas 6, as amended, be applied? 4.',
38593:'yes. paragraph 40 of sffas 6, as amended, provides alternative methods for establishing opening balances for reporting entities that meet',
38594:'the specified conditions and elect to apply any of the alternative methods available. 5. for those reporting entities, the implementation',
38595:'guidance provided in paragraph 41 of sffas 6, as amended, may also be applied. paragraph 41 states: accumulated depreciation/amortization shall',
38596:'be recorded based on the estimated cost and the number of years the pp&e has been in use relative to',
38597:'its estimated useful life. alternatively, the pp&e may be recorded at its estimated net remaining cost45 and depreciation/amortization charged over',
38598:'the remaining life based on that net remaining cost. 45net remaining cost is the original cost of the asset less',
38599:'any accumulated depreciation/amortization to date. 1these clarifications were outside the scope of the implementation guidance that fasab provided intechnical release',
38600:'tr 18, implementation guidance for establishing opening balances. page 3 sig 6.1 fasab handbook, version 20 06/21 sig 6.1 6.',
38601:'this alternative allows for pp&e to be recorded at its estimated net remaining cost often called net book value, which',
38602:'is the original cost of the asset less any accumulated depreciation/amortization to date.2this alternative was provided as a costbeneficial option',
38603:'for the year of implementation. 7. an important premise for all the opening balance alternatives is that management should expect',
38604:'to provide adequate documentation that is consistent with the method used and supports the overall reasonableness of the valuation.3 further,',
38605:'management is also responsible for maintaining adequate documentation of data sources and the application of methodologies.4applying the provisions of paragraph',
38606:'41 does not alter the requirement to ensure adequate support for any values established for opening balances using the alternatives',
38607:'methods such as deemed cost, including accumulated depreciation and in service dates. effective date 8. this guidance is effective upon',
38608:'issuance. the provisions of this staff implementation guidance need not be applied to immaterial items. 2therefore, in the year of',
38609:'implementation the opening balance of accumulated depreciation would be zero and the depreciation/amortization expense would be charged based on the',
38610:'net remaining cost and the remaining life. this alternative also is applicable to required disclosures articulated in par. 45 of',
38611:'sffas 6, as amended. 3tr 18, par. 10. 4tr 18, par. 11. page 4 sig 6.1 fasab handbook, version 20',
38612:'06/21 sig 6.1 basis for conclusions fasab has authorized its staff to prepare sig to provide timely guidance on certain',
38613:'financial accounting and reporting problems, in accordance with the boards rules of procedure, as amended and restated through october 2010.',
38614:'the provisions of sig need not be applied to immaterial items. this appendixdiscusses some factors considered significant by staff in',
38615:'reaching the conclusions in this sig. it includes the reasons for accepting certain approaches and rejecting others. some factors were',
38616:'given greater weight than other factors. the guidance enunciated in the technical guidance sectionnot the material in this appendixshould govern',
38617:'the accounting for specific transactions, events, or conditions. this guidance may be affected by later statements or other pronouncements. the',
38618:'fasab handbook is updated annually and includes a status section directing the reader to any subsequent pronouncements that amend this',
38619:'sig. within the text of the documents, the authoritative sections are updated for changes. however, this appendix will not be',
38620:'updated to reflect future changes. the reader can review the basis for conclusions of the amending statement or other pronouncement',
38621:'for the rationale for each amendment. a1. after the issuance of sffas 50, establishing opening balances for general property, plant,',
38622:'and equipment: amending statement of federal financial accounting standards sffas 6, sffas 10, sffas 23, and rescinding sffas 35, dod',
38623:'inquired whether the alternative methods for establishing opening balances could be applied in concert with the second sentence in paragraph',
38624:'41 of sffas 6, as amended. because deemed cost as defined in the amendmentsto sffas 6 was not incorporated in',
38625:'paragraph 41, it may be unclear whether recording pp&e at net remaining cost is appropriate when deemed cost is used',
38626:'to establish initial amounts. a2. fasab staff drafted a response based upon the question received from dod. because deemedcost isa',
38627:'surrogatefor initialcosts,staff concluded the alternative to record pp&e at estimatednet remaining cost isappropriateeven whenthe surrogate or deemed cost is used.',
38628:'staff hosted a public meeting with the preparer and auditor community to discuss the draft response. a3. the participants discussed',
38629:'several issues regarding documentation and support for opening balances, including the underlying inservice dates, useful lives, and capital improvements. the',
38630:'participants noted concerns with these areas but understood that those particular issues went beyond the scope of the proposed sig.',
38631:'participants acknowledged that the proposed guidance related to a very narrow scope. page 5 sig 6.1 fasab handbook, version 20',
38632:'06/21 sig 6.1 a4. the scope of this guidance is strictly to answer the question put forth in paragraph 3;',
38633:'it does not provide guidance on useful lives, estimating remaining useful lives, or the treatment of capital improvements. a5. the',
38634:'proposed sig 6.1: clarification of paragraphs 4041 of sffas 6, accounting for property, plant, and equipment, as amended, was available',
38635:'for public comment for the required 15day period. fasab staff received four comment letters from federal preparers. no disagreements or',
38636:'suggestions were provided. a6. the board has reviewed this sig and a majority of members do not object to its',
38637:'issuance. page 6 sig 6.1 fasab handbook, version 20 06/21 appendixa:topical index this index provides references to the topics in',
38638:'this volume. references to the pronouncements are organized as follows: the first character indicates that it is a concepts statement',
38639:'c, a standards statements,aninterpretationi,atechnicalreleaset,atechnicalbulletinbor staff implementation guidance g. this letter is followed by a number to indicate which pronouncement it',
38640:'refers to. the number is followed by a “p” for paragraph which is followed by the paragraph numbers. this index',
38641:'does not encompass all topics addressed in fasab pronouncements, may not include all references for each topic, and should not',
38642:'be considered authoritative. in addition to accounting topics, the index lists certain agencies or programs that have been used in',
38643:'illustrations or that have unique provisions within the standards. a accomplishments. . . . . . . . . .',
38644:'. . . . . . . . . . . . . . . . . . . .c1p128129',
38645:'accountability c1p7374 accounts payable accountingfor s1p7480 basisfor conclusions s1p151156 accounts receivable accountingfor s1p4052,b20201 assessments . . . . . .',
38646:'. . . . . . . . . . . . . . . . . . . .',
38647:'. . . . . . . . . . s7p5355 basisfor conclusions s1p116133 interestreceivables s1p5356 sales of receivables. .',
38648:'. . . . . . . . . . . . . . . . . . . .',
38649:'. . . . . . . . . . .s7p301 acquisition cost assets of other retirementbenefitplans s5p85 concepts c7p1213',
38650:'general pp&e . . . . . . . . . . . . . . . . . .',
38651:'. . . . . . . . . . .s6p26 , t13,t15 inventory s3p20,s3p23 investments in treasury securities. .',
38652:'. . . . . . . . . . . . . . . . . . s1p6870 pension',
38653:'plan assets. . . . . . . . . . . . . . . . . . .',
38654:'. . . . . . . . . . . . . . .s5p68 advances see also other current',
38655:'liabilities accountingfor s1p5761 basisfor conclusions s1p137139 agriculture, department of interentity costs. . . . . . . . . .',
38656:'. . . . . . . . . . . . . . . . . . . .',
38657:'. . . . . .s4p225 amortization basisfor conclusions s1p147 direct loans. . . . . . . . .',
38658:'. . . . . . . . . . . . . . . . . . . .',
38659:'. . . . . . . . s2p3032 investmentsintreasurysecurities s1p7071 appropriations see also other financing sources transactions. . .',
38660:'. . . . . . . . . . . . . . . . . . . .',
38661:'. . . . . . . . . . . . s7p331332 appendixa page 1 fasabhandbook,version 2006/21 appendix a:',
38662:'topical index topic reference unexpended. . . . . . . . . . . . . . . .',
38663:'. . . . . . . . . . . . . . . . . . . .',
38664:'. s7p7172 asbestosrelated cleanup costs estimatesof b20061p2530 liabilities for. b20061p3135 expenses for b20061p3641 notedisclosures about b20061p4749 implementation t10 assessments s7p5355',
38665:'audit legal representation letter. . . . . . . . . . . . . . . . .',
38666:'. . . . . . . . . . . . . .t1 authorityto borrow basisforconclusions s1p112113 definition s1p3435',
38667:'b bad debt see also uncollectibles accounts receivable . . . . . . . . . . . .',
38668:'. . . . . . . . . . . . . . . . . . s1p4451 loans',
38669:'post1991. . . . . . . . . . . . . . . . . . . .',
38670:'. . . . . . . . . . . . . . . .s2p7172 pre1992direct. s2p47 balance sheet',
38671:'see also display. . . . . . . . . . . . . . . . . .',
38672:'.c2p8485 bankdepositinsurance s7p284 budgetaccounts. . . . . . . . . . . . . . . . .',
38673:'. . . . . . . . . . . . . . .c2p1321 budgetary information. . . .',
38674:'. . . . . . . . . . . . . . . . . . . .',
38675:'. . s7p7782 budgetary integrity budgetexecution. c1p46 budgetstatement c21p6364 financialreporting c2p6 financialstatements c2p56 focusofsffac1 c1p42 information for users . .',
38676:'. . . . . . . . . . . . . . . . . . . .',
38677:'. . . . . . . . . .c1p110 objective 1. . . . . . . . .',
38678:'. . . . . . . . . . . . . . . . . . . .',
38679:'. . . . . . . c1p112121 user groups. . . . . . . . . . .',
38680:'. . . . . . . . . . . . . . . . . . . .',
38681:'. . . . . .c1p8991 budgetary resources characterof s7p24 financial & budgetary accounting . . . . . .',
38682:'. . . . . . . . . . . . s7p203225 reporting of. . . . . .',
38683:'. . . . . . . . . . . . . . . . . . . .',
38684:'. . . . . . . . . . . . s7p7782 statement of budgetary resources. . . .',
38685:'. . . . . . . . . . . . .c2p104105 businesstypeactivities . . . . . .',
38686:'. . . . . . . . . . . . . . . . . . . s6p2324',
38687:'cancellation of debt. . . . . . . . . . . . . . . . . .',
38688:'. . . . . . . . . . . .s7p313 appendixa page 2 fasabhandbook,version 2006/21 appendix a: topical',
38689:'index topic reference capitalization threshold basisfor conclusions s6p148149 pp&e . . . . . . . . . . .',
38690:'. . . . . . . . . . . . . . . . . . . .',
38691:'. . . . . . . . . . . . . .s6p13 cash accountingfor s1p2730 basisfor conclusions s1p103105',
38692:'cash basis of accounting financial reporting. . . . . . . . . . . . . . .',
38693:'. . . . . . . . . . . . . . . . . . s7p2526 nonexchangerevenue',
38694:'s7p174 changes inaccounting principles. . . . . . . . . . . . . . s21p1213 changes inassumptions',
38695:'reporting for pensions, other retirement benefits and other postemployment benefits . . . . . . . . . .',
38696:'. s33p1925 civilservice retirement system. . . . . . . . . . . . . . . .',
38697:'. . . .s5p61 classification of transactions illustrations. . . . . s7p235370 classifiedactivities . . . . . .',
38698:'. . . . . . . . . . . . . . . . . . . .',
38699:'. . . . . .s56,i8 cleanup cost accountingfor s6p85111,19 basisfor conclusions s6p182199 reimbursementfor s7p292 implementation t10,t11 coast guard cleanup',
38700:'cost reimbursement. . . . . . . . . . . . . . . . . . .',
38701:'. . . . . .s7p292 federal mission pp&e illustration . . . . . . . . . .',
38702:'. . . . . . . . s6p202203 commerce, departmentof interentity costs. . . . . . . .',
38703:'. . . . . . . . . . . . . . . . . . . .',
38704:'. . . . . . . .s4p225 commodities see also goods held under price support and stabilization programs .',
38705:'. . . . . . . . . . . . . . . s3p92109 commoditycredit corporation commodities s3p94',
38706:'cropinsurance s7p284 transfers by ccc to fcic. . . . . . . . . . . . . .',
38707:'. . . . . . . . . . . . . .s7p340 comparability financialreports c1p164 performance. c2p109 completeness',
38708:'c2p109 comprehensive longterm projections for the u.s. government. . . . . . . . . . . . .',
38709:'. . . . . . . . . . . . s36p1944 consistency financialreports c1p163 performance. c2p109 appendixa page',
38710:'3 fasabhandbook,version 2006/21 appendix a: topical index topic reference consolidated financialreport of theu.s. government. c4p69,s24,s32,s35,s36,s45,s46, . . . . .',
38711:'. . . . . . . . . . . . . . . . . . . .',
38712:'. . . . . . . . . . . . . . . . . . .s47,s49,s51,s52 consolidation',
38713:'. . . . . . . . . . . . . . . . . . . .',
38714:'. . . . . . . . . . . . . s4p244247 contingencies. . . . . .',
38715:'. . . . . . . . . . . . . . . . . . . .',
38716:'. . . . . . . . . s5p3542 contractauthority . . . . . . . . .',
38717:'. . . . . . . . . . . . . . . . . . . .',
38718:'. . .s1p34 contractordeveloped software. . . . . . . . . . . . . . . .',
38719:'.s6p145 correctionof errors s21p1011 cost finding techniques. . . . . . . . . . . . . .',
38720:'. . . . . . . . . . . s1p7476 costbenefit. . . . . . . .',
38721:'. . . . . . . . . . . . . . . . . . . .',
38722:'. . . . . . .c1p151155 costing methodology see also managerial costaccounting. . . . . . . .',
38723:'. . . . . . . . . . . . . . . . . . . .',
38724:'. . . s4p116162 custodialactivities basisfor conclusions s3p151153 custodial transfers. . . . . . . . . . .',
38725:'. . . . . . . . . . . . . . . . . . . .',
38726:'. . .s7p353 property . . . . . . . . . . . . . . . .',
38727:'. . . . . . . . . . . . . . . . . . . .',
38728:'. . . . . . .s3p57 revenue. . . . . . . . . . . . .',
38729:'. . . . . . . . . . . . . . . . . . . .',
38730:'. . . . . . . . . .s7p49 customs service collecting revenue. . . . . . .',
38731:'. . . . . . . . . . . . . . . . . . . .',
38732:'. . . s7p289291 fees. . . . . . . . . . . . . . . .',
38733:'. . . . . . . . . . . . . . . . . . . .',
38734:'. . . . . s7p250255 d dedicated collections definition s27p1118 reporting and disclosure. . . . . . .',
38735:'. . . . . . . . . . . . . . . . . . . s27p1935',
38736:'deemed cost definition s48p7 opening balances for inventory, om&s,andstockpilematerials s48p1012 deferred maintenanceand repairs condition information. . . . . .',
38737:'. . . . . . . . . . . . . . . . . . . .',
38738:'. . . . . .s42p20 measurement and reporting . . . . . . . . . . .',
38739:'. . . . . . . . . . . . . s42p916 depreciation basisfor conclusions s6p153156 expense. .',
38740:'. . . . . . . . . . . . . . . . . . . .',
38741:'. . . . . . . . . . . . . . . . . . s6p3539 direct',
38742:'loansand loan guarantees accounting and reporting. . . . . . . . . . . . . . .',
38743:'. . . . . . . . . . . . s2p2161 additional disclosure requirements . . . .',
38744:'. . . . . . . . . . . . . . s18p1011 preparingsubsidy estimates t6 see also',
38745:'federal credit reformact of 1990 directed flows of resources accountingfor s7p69 appendixa page 4 fasabhandbook,version 2006/21 appendix a: topical index',
38746:'topic reference basisfor conclusions s7p198202 discountonbonds s1p69 display balance sheet . . . . . . . . . .',
38747:'. . . . . . . . . . . . . . . . . . . .',
38748:'. . . . .c2p8485 financial information . . . . . . . . . . . . .',
38749:'. . . . . . . . . . . . . . . . c2p54112 financialreporting c2p7483 flow',
38750:'statements c2p5862 other information. . . . . . . . . . . . . . . . .',
38751:'. . . . . . . . . . . . . . . .c2p6873 required supplementary stewardship information',
38752:'. . . . . . . . . .s8p21 statement of budgetary resources. . . . . . .',
38753:'. . . . . . . . . .c2p104105 statementofchanges innetposition. c2p100 statement of custodialactivities . . . .',
38754:'. . . . . . . . . . . . . . .c2p101103 statementoffinancing s7p95102 statementofnetcosts c2p8699 statement',
38755:'of program performance measures . . . . . . . . c2p106111 stockstatements. c2p57 donations definition. . . .',
38756:'. . . . . . . . . . . . . . . . . . . .',
38757:'. . . . . . . . . . . . . . . . . .s7p258 general pp&e',
38758:'. . . . . . . . . . . . . . . . . . . .',
38759:'. . . . . . . . . . . . . . . . . .s6p30 pp&e .',
38760:'. . . . . . . . . . . . . . . . . . . .',
38761:'. . . . . . . . . . . . . . . . . . . .',
38762:'. . . .s6p26 revenue. . . . . . . . . . . . . . . .',
38763:'. . . . . . . . . . . . . . . . . . . .',
38764:'. . . . . . .s7p62 e efforts c1p201 employee benefits contributions to health benefit plans . . .',
38765:'. . . . . . . . . . . . . s7p318319 contributions to pension and other retirement',
38766:'benefit plans . . . . . . . . . . . . s7p316317 unemployment benefits and workers comp.',
38767:'. . . . . . . . . . s7p320321 entity c2, s47 entityassets accountingfor s1p2526 basisfor conclusions s1p100102',
38768:'environmental liabilities probable and reasonably estimable. . . . . . . . . . . . . . .',
38769:'. . . . . . . . .t2 environmental liabilities see also cleanup cost contingencies s5p3542 exchange revenue see',
38770:'also revenue . . . . . . . . . . . . . s7p3347 f fairvalue s6p20 federalaccounting',
38771:'standards advisory board. . . . . . . . . . . . . . . . . .',
38772:'. . . . . . . . . . . . .c1p2329 appendixa page 5 fasabhandbook,version 2006/21 appendix a:',
38773:'topical index topic reference federal communications commission auctionoftheradiospectrum s7p278279 federal credit reformact of 1990. . . . . . .',
38774:'. . . . . . . . . .s2p614 federal crop insurance illustration. . . . . . .',
38775:'. . . . . . . . . . . . . . . . . . . .',
38776:'. . . . . . . . . . . . . .s5p110 federaldebt s5p4755 federal deposit insurance illustration.',
38777:'. . . . . . . . . . . . . . . . . . . .',
38778:'. . . . . . . . . . . . . . . . . . . .s5p110',
38779:'federal employee contributions. . . . . . . . . . . . . . s7p285288 federal employee retirement',
38780:'system . . . . . . . . . . . . . .s5p61 federal financialreporting environment. . .',
38781:'. .c1p177179 federal mission property, plant,and equipment basisfor conclusions s8p120121 federal reserve system deposits of earnings . . . .',
38782:'. . . . . . . . . . . . . . . . . . . .',
38783:'. . . . s7p256257 entity s47 fiduciaryactivities. . . . . . . . . . . . .',
38784:'. . . . . . . . . . s31p1030, g31.1 financialposition c1p180182 financialreporting c1p2170 finesand penalties definition. .',
38785:'. . . . . . . . . . . . . . . . . . . .',
38786:'. . . . . . . . . . . . . . . . s7p260262 delinquent taxes. .',
38787:'. . . . . . . . . . . . . . . . . . . .',
38788:'. . . . . . . . . . . . . .s7p263 fiscalsustainability see longterm projections foreclosed property',
38789:'accountingfor s3p7991 basisfor conclusions s3p154158 sales of propertyassociated with pre1992 direct loans and loan guarantees . . . . .',
38790:'. . . . . . . . . . . . . . .s7p300 foreigncurrencyseealso cash s1p27 forfeited property',
38791:'accountingfor s3p6778 basisfor conclusion s3p139153 forfeiturerevenue s7p264269 fullcostsee also managerialcostaccounting s4p89104 fund balance with treasury authority to borrow. . .',
38792:'. . . . . . . . . . . . . . . . . . . .',
38793:'. . . . . . . . . . . .s1p35 basisforconclusions s1p106115 clearing account balances. . . .',
38794:'. . . . . . . . . . . . . . . . . . . .',
38795:'. . . . .s1p32 contractauthority s1p34 obligatedbalances s1p37 unobligatedbalances s1p3738 appendixa page 6 fasabhandbook,version 2006/21 appendix a: topical index',
38796:'topic reference fund balance with treasury. . . . . . . . . . . . . . .',
38797:'. . . . . . . . .s1p38 funded liabilities. . . . . . . . . .',
38798:'. . . . . . . . . . . . . . . . . . . .',
38799:'. . s1p9496 funds from dedicated collections seealso dedicatedcollections s43p513 g gains . . . . . . . .',
38800:'. . . . . . . . . . . . . . . . . . . .',
38801:'. . . . . . . . . . . . . . s7p293304 general servicesadministration interentity costs. .',
38802:'. . . . . . . . . . . . . . . . . . . .',
38803:'. . . . . . . . . . . . . .s4p225 generallyacceptedaccounting principles distinguishing basic information and',
38804:'required supplementaryinformation c2p73b73e hierarchy. . . . . . . . . . . . . . . . .',
38805:'. . . . . . . . . . . . . . . . . . . .',
38806:'. . . . s34p58 standards issued by the financialaccounting standardsboard s34p912 goods held under price supportand stabilization programs accountingfor',
38807:'s3p92109 basisfor conclusions s3p159162 governmentalassetsand liabilities basisfor conclusions s1p9899 governmentalliabilities accountingfor s1p2124 h harbor maintenance trust fund user fees s7p249',
38808:'heritageassetsand stewardship land . . . . . . . . . s29p1927 hierarchy of gaap see generallyaccepted accounting principles',
38809:'historical cost concepts of. . . . . . . . . . . . . . . . .',
38810:'. . . . . . . . . . . . . . . . . . . .',
38811:'. . . . .s7p12 estimating for pp&e . . . . . . . . . . . .',
38812:'. . . . . . .s6p40, s6p45,s23p1018 i impairment seealso “internaluse software” s44 income tax burden post 1999 direct',
38813:'loans . . . . . . . . . . . . . . . . . . .',
38814:'. . . . . . . . . . s7p69.1 indian trust funds entity i1p3 insuranceand guarantees . .',
38815:'. . . . . . . . . . . . . . . . . . . s5p97121',
38816:'interentity costs see also managerial costaccountings4p105115 appendixa page 7 fasabhandbook,version 2006/21 appendix a: topical index topic reference interest post 1999',
38817:'direct loans . . . . . . . . . . . . . . . . . .',
38818:'. . . . . . . . . . . .s7p280 receivables from custodial activities. . . . .',
38819:'. . . . . . . . . . . . . . .s7p281 received by on fund from',
38820:'another. . . . . . . . . . . . . . . . . . . .',
38821:'. .s7p309 receivedbytreasury s7p327 treasury securities held by revolving funds. . . . . . . . . . .',
38822:'s7p322323 treasury securities held by trust and special funds. . . . . s7p306308 treasury securities held by trust revolving',
38823:'funds. . . . . . . s7p324325 uninvested funds received by financing accounts. . . . . . .',
38824:'. . .s7p326 interest method. . . . . . . . . . . . . . . .',
38825:'. . . . . . . . . . . . . . . . . . . .s1p71',
38826:'interest receivable accountingfor s1p5556 basisforconclusions s1p134136 interest, dividends,and rents . . . . . . . . . . .',
38827:'. . . . . . s7p272273 interior, u.s. department of the natural resources. . . . . . .',
38828:'. . . . . . . . . . .s38p1329, b20111p1229 internaluse software . . . . . .',
38829:'. . . . . . . . . . . . . . . . . . . .',
38830:'s10p836 implementationguidance tr16 intragovernmentalassetsand liabilities accountingfor s1p1824 basisforconclusions s1p9899 inventory held for sale accountingfor s3p1735 alternative valuation method for opening',
38831:'balances. . . . . . . . . .s3p26 basisforconclusions s3p111133 held for repair or remanufacture . . .',
38832:'. . . . . . . . . . . . s3p35, i7p1012 revaluations s7p349350 investments in treasury securities',
38833:'basisforconclusions s1p140150 market value disclosure. . . . . . . . . . . . . . . .',
38834:'. . . . . . . . . . . . . . .s1p72 marketable. . . . .',
38835:'. . . . . . . . . . . . . . . . . . . .',
38836:'. . . . . . . . . . . . . . . .s1p65 marketbased. . . .',
38837:'. . . . . . . . . . . . . . . . . . . .',
38838:'. . . . . . . . . . . . . . .s1p64 nonmarketable par value. . .',
38839:'. . . . . . . . . . . . . . . . . . . .',
38840:'. . . . . . .s1p63 investments in treasury securities . . . . . . . . .',
38841:'. . . . s1p6273 items held for remanufacture . . . . . . . . . . .',
38842:'. . . . . . . .i7p1017 j judgment fund accountingfor i2p3 justice, department of diversionfees s7p283 forfeitures .',
38843:'. . . . . . . . . . . . . . . . . . . .',
38844:'. . . . . . . . . . . . . . . s7p264269 appendixa page 8 fasabhandbook,version',
38845:'2006/21 appendix a: topical index topic reference labor, departmentof stateunemploymenttaxes s7p247248 lastin,firstoutmethod s3p132 latest acquisition cost inventory & related property.',
38846:'. . . . . . . . . . . . . . . . . . . .',
38847:'. . . . . .s3p23 leases. . . . . . . . . . . . . .',
38848:'. . . . . . . . . . . . . . . . . . . .',
38849:'. . . . . . . . . . . . . .s54 legitimacy. c2p109 liabilities definition s5p19 exchange',
38850:'transactions. . . . . . . . . . . . . . . . . . . .',
38851:'. . . . . . . . . s5p2223 governmentacknowledge events . . . . . . . .',
38852:'. . . . . . . . . . . . s5p3032 governmentrelated events . . . . .',
38853:'. . . . . . . . . . . . . . . . . . . .',
38854:'s5p2729 litigation. . . . . . . . . . . . . . . . . . .',
38855:'. . . . . . . . . . . . . . . . . . . .',
38856:'s12p1011 nonexchangetransactions s5p2425 life insurance premiums. . . . . . . . . . . . . . .',
38857:'. . . . . . . . . . . .s7p284 loan guarantees see direct loans and loan guarantees',
38858:'longterm projections. . . . . . . . . . . . . . . . . . .',
38859:'. . . . . . s36p1944 losses on contracts. . . . . . . . . . .',
38860:'. . . . . . . . . . . . . . . . . . . .s7p36',
38861:'losses. . . . . . . . . . . . . . . . . . . .',
38862:'. . . . . . . . . . . . . . . . . . . .',
38863:'. s7p293304 lowerof costormarket s3p118120 m management discussionandanalysis. . . . . . . . . . . . .',
38864:'.s7p191 management’s discussionandanalysis basicconcept c3p1 discussion andanalysis of performance. . . . . . . . . . . .',
38865:'. . .c3p4249 discussion andanalysis of systems, controls, compliancec3p4041 relationshiptoother reports c3p1822 schematicdiagram c3p8 standard s15p18 topics. . . .',
38866:'. . . . . . . . . . . . . . . . . . . .',
38867:'. . . . . . . . . . . . . . . . . .c3p2439 managerial costaccounting',
38868:'cost subsidies. . . . . . . . . . . . . . . . . . .',
38869:'. . . . . . . . . . . . . . s7p333337 costing methodology. . . .',
38870:'. . . . . . . . . . . . . . . . . . . .',
38871:'s4p116162,t15 full cost. . . . . . . . . . . . . . . . . .',
38872:'. . . . . . . . . . . . . . . . .s4p89104,t15 interentity costs .',
38873:'. . . . . . . . . . . . . . . . . . . .',
38874:'. . . . . . . . . . s4p105115 managerialcostaccountingconcepts s4p4166 purposes ofcostinformation s4p3140 requirementforcostaccounting s4p6776 responsibility segments',
38875:'. . . . . . . . . . . . . . . . . . . .',
38876:'. . . . . . . s4p7788 managerial costaccounting concepts appendixa page 9 fasabhandbook,version 2006/21 appendix a: topical index',
38877:'topic reference see also managerial costaccounting. . . . . . . . . . . . . . .',
38878:'s4p4166 managerial costaccounting . . . . . . . . . . . . . . . . .',
38879:'. . . . . s4p12 marketvalue investments . . . . . . . . . . . .',
38880:'. . . . . . . . . . . . . . . . . . . .',
38881:'. . . . . . . .s1p72 property . . . . . . . . . . .',
38882:'. . . . . . . . . . . . . . . . . . . .',
38883:'. . . . . . . . . s3p5970 military retirement system. . . . . . . .',
38884:'. . . . . . . . . . . . . . . . .s5p61 minerals management service',
38885:'exchange revenue unrelated to recognized cost. . . . . . . s7p140147 exchange revenue. . . . . .',
38886:'. . . . . . . . . . . . . . . . . . . .',
38887:'. . . . . . . . .s7p45 rents, royalties and bonuses. . . . . . . .',
38888:'. . . . . . . . . . . . . . s7p274277 modified cash basis taxes &',
38889:'duties. . . . . . . . . . . . . . . . . . . .',
38890:'. . . . . . . . . . . . . s7p172173 morelikelythannot s1p44 n nationalflood insurance illustration.',
38891:'. . . . . . . . . . . . . . . . . . . .',
38892:'. . . . . . . . . . . . . . . . . . . .s5p110',
38893:'nationalscience foundation interentity costs. . . . . . . . . . . . . . . . .',
38894:'. . . . . . . . . . . . . . . . . . .s4p225 naturalresources',
38895:'custodial activity. . . . . . . . . . . . . . . . . . .',
38896:'. . . . . . . . . . . . . s7p142143 federal oil and gas resources, accounting',
38897:'for . . . . . . . . . . s38p1329 meetingtheassetdefinition c5p23,c5p32 other federal natural resources, accounting for',
38898:'. . . . . .b20111p1229 net costs display c2p100 exchange revenue . . . . . . . .',
38899:'. . . . . . . . . . . . . . . . . . . .',
38900:'. . . s7p4344 netposition c2p84 nonentityassets s1p26 nonexchange revenue recognitionbyrecipients i5p2 nonexchange revenue see also revenue . . .',
38901:'. . . . . . s7p4869 nonfederal physicalproperty. . . . . . . . . . . .',
38902:'. . . . . . s8p8388 nonrecourse loans not subject to credit reformact provisions accountingfor s3p93102 basisfor conclusions s3p159160',
38903:'nonvalued seizedand forfeited property reporting on . . . . . . . . . . . . . .',
38904:'. . . . . . . . . . . . . . . . . . . .',
38905:'. . . . . . . .t4 nuclear regulatory commission fees. . . . . . . . .',
38906:'. . . . . . . . . . . . . . . . . . . .',
38907:'. . . . . . . . . . . . . . . .s7p282 appendixa page 10 fasabhandbook,version',
38908:'2006/21 appendix a: topical index topic reference o obligations incurred. . . . . . . . . . .',
38909:'. . . . . . . . . . . . . . . . . . . .s7p96',
38910:'office of personnelmanagement retirementcosts c2p51 opening balances definition s48p8 alternative valuation for property plant and equipment s6p40,t18 alternative valuation for',
38911:'internal use software. . . . s10p36,t18, g6.1 alternative valuation for inventory, om&s, and stockpile materials . . . .',
38912:'. . . . . . . . . . . . . . . . . . . .',
38913:'. . .s48p1012,t18 operating materialsand supplies accountingfor s3p3650 held for repair or remanufacture . . . . . . .',
38914:'. . . . . . . . . . . . . . .i7p1314 otheraccompanyinginformation c2p73f73g other currentliabilities. .',
38915:'. . . . . . . . . . . . . . . . . . . .',
38916:'s1p158160 other financing sources appropriations unexpended. s7p71 used. s7p72 financing imputed for cost subsidies. . . . . . .',
38917:'. . . . . . . . . . . . .s7p73 general s7p70 transfersofassets s7p7475 other financing sources.',
38918:'. . . . . . . . . . . . . . . . . . . .',
38919:'. . . s7p7075 other postemployment benefits . . . . . . . . . . . . .',
38920:'. . . s5p9496 reportingchanges inassumptions s33p1925 selecting discount rates. . . . . . . . . . .',
38921:'. . . . . . . . . . . . . . . . s33p2832 selecting valuation dates.',
38922:'. . . . . . . . . . . . . . . . . . . .',
38923:'. . . . . s33p3334 other retirement benefits . . . . . . . . . . .',
38924:'. . . . . . . . . . . s5p7993 reportingchanges inassumptions s33p1925 selecting discount rates. . .',
38925:'. . . . . . . . . . . . . . . . . . . .',
38926:'. . . . s33p2832 selecting valuation dates. . . . . . . . . . . . .',
38927:'. . . . . . . . . . . . . s33p3334 outcome indicators . . . .',
38928:'. . . . . . . . . . . . . . . . . . . .',
38929:'. . . . . . . . . . . . .c1p206208 informationon s8p93 measures. . . . .',
38930:'. . . . . . . . . . . . . . . . . . . .',
38931:'. . . . . . . . . . . . . . . . .s8p99 outer continentalshelf .',
38932:'. . . . . . . . . . . . . . . . . . . .',
38933:'. . . . .s7p274 output definition s8p99 informationon s8p93 measures c1p205 appendixa page 11 fasabhandbook,version 2006/21 appendix a: topical',
38934:'index topic reference overseas investment insurance illustration. . . . . . . . . . . . . .',
38935:'. . . . . . . . . . . . . . . . . . . .',
38936:'. . . . . . .s5p110 p penalties see also fines and penalties . . . . . .',
38937:'. . . . . . . . . . .s7p61 pensionand retirement health care liabilities measurementdata i3p34 pension benefit',
38938:'guarantee corporation illustration. . . . . . . . . . . . . . . . . .',
38939:'. . . . . . . . . . . . . . . . . . . .',
38940:'. . .s5p110 insurance. . . . . . . . . . . . . . . . .',
38941:'. . . . . . . . . . . . . . . . . . . .',
38942:'. . . .s5p101 premiums. . . . . . . . . . . . . . . .',
38943:'. . . . . . . . . . . . . . . . . . . .',
38944:'. . . . .s7p284 pensions accountingfor excesspayments i4p917 reportingchanges inassumptions s33p1925 selecting discount rates. . . . . .',
38945:'. . . . . . . . . . . . . . . . . . . .',
38946:'. s33p2832 selecting valuation dates. . . . . . . . . . . . . . . .',
38947:'. . . . . . . . . . s33p3334 performance measures purpose of . . . . .',
38948:'. . . . . . . . . . . . . . . . . . . .',
38949:'. . . . . . . . . . . . . s4p3436 statementon c2p65 premium on bonds .',
38950:'. . . . . . . . . . . . . . . . . . . .',
38951:'. . . . . . . . . . . . .s1p69 prepayments see also other current liabilities .',
38952:'. . . . . . s1p5759 prior periodadjustments . . . . . . . . . . .',
38953:'. . . . . . . . . . . . . . .s7p76 probable . . . .',
38954:'. . . . . . . . . . . . . . . . . . . .',
38955:'. . . . . . . . . . . . . . . . . . .s5p33 progress',
38956:'payments accounts payable s1p7879 advances & prepayments . . . . . . . . . . . . .',
38957:'. . . . . . . . . . . . . . . .s1p58 property, plant,and equipment pp&e',
38958:'exchange. . . . . . . . . . . . . . . . . . . .',
38959:'. . . . . . . . . . . . . . . . . s7p297299 impairment. .',
38960:'. . . . . . . . . . . . . . . . . . . .',
38961:'. . . . . . . . . . . . . . . . . . . .',
38962:'.s44 revaluations s7p37348 stewardship pp&e. . . . . . . . . . . . . . . .',
38963:'. . . . . . . . . . . . . . . . . . .s8p11 publicprivate',
38964:'partnerships definition s49p1619 disclosures s49p2225 riskbasedcharacteristics s49p2021 purchaseagreements. . . . . . . . . . . . .',
38965:'. . . . . . . . . . . . . s3p94109 r railroadretirementboard s7p341343 recognition . .',
38966:'. . . . . . . . . . . . . . . . . . . .',
38967:'. . . . . . . . . . . . . . . . . .s5p19 reconciliationstatement s7p9194',
38968:'refunds exchange revenue . . . . . . . . . . . . . . . . .',
38969:'. . . . . . . . . . . . . . . . .s7p41 appendixa page 12',
38970:'fasabhandbook,version 2006/21 appendix a: topical index topic reference nonexchange revenue . . . . . . . . . .',
38971:'. . . . . . . . . . . . . . . . . . s7p5758 relevance',
38972:'c1p161 reliability financialreporting c1p160 performance measure c2p109 rentsand royalties . . . . . . . . . . .',
38973:'. . . . . . . . . . . . . . . . s7p274277 repairallowance. . .',
38974:'. . . . . . . . . . . . . . . . . . . .',
38975:'. . . . . . . . . s3p3233 reportingentityseealso entity. c2,s47 reportingobjectives c1p105150 requirement for cost accounting see',
38976:'also managerial costaccounting. . . . . . . . . . . . . . . s4p6776 researchanddevelopment s8p96101',
38977:'responsibility segments activities of. c2p75 cost of . . . . . . . . . . . . .',
38978:'. . . . . . . . . . . . . . . . . . . .',
38979:'. . . . . . . . . .s7p122 responsibility segments see also managerial costaccounting standards for . .',
38980:'. . . . . . . . . . . . . . . . . . . .',
38981:'. . . . . . . . . . . . . . s4p7788 restrictedamounts basis for conclusions cash.',
38982:'. . . . . . . . . . . . . . . . . . . .',
38983:'. . . . . . . . . . . . . . . . .s1p103105 funds for specificpurposes.',
38984:'s1p115 cash. . . . . . . . . . . . . . . . . . .',
38985:'. . . . . . . . . . . . . . . . . . . .',
38986:'. . . . . . .s1p30 fundbalancewithtreasury s1p38 results of operations appropriations s7p72 balancesheetnetposition. c2p84 display c2p73 md&a. c1p181',
38987:'nonfinancialinformation c1p231232 other financing sources. . . . . . . . . . . . . . . .',
38988:'. . . . . . . . . . . . . .s7p70 prior periodadjustment. . . . .',
38989:'. . . . . . . . . . . . . . . . . . . .',
38990:'. . . . .s7p203 reportingobjectives c1p47 reports on c1p191 revenue. . . . . . . . . .',
38991:'. . . . . . . . . . . . . . . . . . . .',
38992:'. . . . . . . . . . . . .s7p17 taxes & duties. . . . .',
38993:'. . . . . . . . . . . . . . . . . . . .',
38994:'. . . . . . . . . . . . .s7p60 the term results of operations . .',
38995:'. . . . . . . . . . . . . . . . s7p224225 transfers in &',
38996:'out . . . . . . . . . . . . . . . . . . .',
38997:'. . . . . . . . . . . . . . .s7p220 retirement of debt securities prior',
38998:'to maturity revolving funds & trust revolving funds. . . . . . . . . . . . .',
38999:'. s7p329330 trustandspecialfunds s7p311312 appendixa page 13 fasabhandbook,version 2006/21 appendix a: topical index topic reference retirement of debt securities prior',
39000:'to maturity. . . . . . . . . . . . . . . . . . .',
39001:'. . . . . . . . . . . . . . . . . s7p303304 revenue classification',
39002:'of transactions . . . . . . . . . . . . .s7p235370 , b20171 exchange revenue .',
39003:'. . . . . . . . . . . . . . . . . . . .',
39004:'. . . . . . . . . . s7p3347 nonexchange revenue . . . . . . .',
39005:'. . . . . . . . . . . . . . . . . . . .',
39006:'. s7p4869 revenue . . . . . . . . . . . . . . . . .',
39007:'. . . . . . . . . . . . . . . . . . . .',
39008:'. . . . . . .s7p30 s sale of assets. . . . . . . . . .',
39009:'. . . . . . . . . . . . . . . . . . . .',
39010:'. . . s7p294300 sales of goods and services intragovernmental by a revolving fund. . . . . . .',
39011:'. . . . . . . . . . . . . . . . . . . .',
39012:'.s7p314 by other thanarevolvingfund s7p315 goods and services in undercover operations. . . . . . . . . .',
39013:'. . .s7p271 goods and services. . . . . . . . . . . . . . .',
39014:'. . . . . . . . . . . . . . . . . .s7p270 government assets',
39015:'other than pp&e, forfeited and foreclosed property . . . . . . . . . . . . .',
39016:'. . . .s7p294 pp&e . . . . . . . . . . . . . . .',
39017:'. . . . . . . . . . . . . . . . . . . .',
39018:'. . . . . s7p295296 securitiesand exchange commission registration and filing fees. . . . . . . .',
39019:'. . . . . . . . . . . . . . . . . . . .s7p282',
39020:'seigniorage . . . . . . . . . . . . . . . . . . .',
39021:'. . . . . . . . . . . . . . . . . . . .s7p305',
39022:'seized property accountingfor s3p5966 basisfor conclusions s3p139153 social insurance accounting and reporting for, entities . . . . . .',
39023:'. s17p2227, s37p3138 accounting and reporting for, governmentwide. . .s17p2932, s37p39 characteristics of s17p1521 managements discussion and analysis of .',
39024:'. . . . . . . . . . . . s37p2327 programs designated as social insurance . .',
39025:'. . . . . . . . . . . . . .s17p14 social security see also social insurance',
39026:'federal employees coverage. . . . . . . . . . . . . . . . . .',
39027:'. . . . . . . .s7p310 recognitionandmeasurement s8p116 software accountingfor s10p836 amortization. . . . . . .',
39028:'. . . . . . . . . . . . . . . . . . . .',
39029:'. . . . . . . . . s10p3234 capitalizable cost s10p1618 definitions s10p89 development phases. . . .',
39030:'. . . . . . . . . . . . . . . . . . . .',
39031:'. . . . . s10p1014 appendixa page 14 fasabhandbook,version 2006/21 appendix a: topical index topic reference enhancements. . .',
39032:'. . . . . . . . . . . . . . . . . . . .',
39033:'. . . . . . . . . . . s10p2527 impairment. . . . . . . .',
39034:'. . . . . . . . . . . . . . . . . . . .',
39035:'. . . . . . . . . s10p2831 sovereignty. c1p50 standard cost costaccounting. . . . . .',
39036:'. . . . . . . . . . . . . . . . . . . .',
39037:'. . . . . . s4p160162 definition s3p123128 system. . . . . . . . . . .',
39038:'. . . . . . . . . . . . . . . . . . . .',
39039:'. . . . . . . . . . . . .s3p22 state, department of interentity costs. . .',
39040:'. . . . . . . . . . . . . . . . . . . .',
39041:'. . . . . . . . . . . . .s4p225 stewardshipreporting s8p1921 stewardship. . . . .',
39042:'. . . . . . . . . . . . . . . . . . . .',
39043:'. . . . . . . . . . s8p134135 stewardship land see heritageassets and stewardship land stewardship property,',
39044:'plant,and equipment pp&e.s8p11 asbestosrelatedcleanupcosts. b20061p4246 stockpile materials accountingfor s3p5156 basisfor conclusions s3p135138 subsequent events. . . . . . .',
39045:'. . . . . . . . . . . . . . . . . . . .',
39046:'. . s39p1117 supplementary medicalinsurance general fund contribution. . . . . . . . . . . . .',
39047:'. . . . . . . . . . . s7p338339 premiums. . . . . . . .',
39048:'. . . . . . . . . . . . . . . . . . . .',
39049:'. . . . . . . . . . . . .s7p284 systemsand control. . . . . .',
39050:'. . . . . . . . . . . . . . . . . . . .c1p146150',
39051:'t taxburden s7p69 taxexpenditures s7p192197,s7p69,s52 tax gap nonexchange revenue gap . . . . . . . . . .',
39052:'. . . . . . . . . . . . s7p188191 oai. . . . . . .',
39053:'. . . . . . . . . . . . . . . . . . . .',
39054:'. . . . . . . . . . . . . . . . . . . .s7p69',
39055:'taxesand duties. . . . . . . . . . . . . . . . . . .',
39056:'. . . . . . . . . . . . . . s7p4960 timeliness c1p162 timeliness c2p109 transfers',
39057:'of assets cash and other assets. . . . . . . . . . . . . . .',
39058:'. . . . . . . . . . . . . . . .s7p344 stewardship pp&e. . .',
39059:'. . . . . . . . . . . . . . . . . . . .',
39060:'. . . . . . . s7p345346 transfersof assets s7p7475 treasury securities accountingfor s1p6273 basisforconclusions s1p140150 treasury, department of',
39061:'forfeitures s7p264269 appendixa page 15 fasabhandbook,version 2006/21 appendix a: topical index topic reference trust fund disclosures s7p68 entity c2p1920 excisetaxes',
39062:'s7p60 over& underfunding. . . . . . . . . . . . . . . . . .',
39063:'. . . . . . . . . . . . .s7p177 social securitytaxes. . . . . .',
39064:'. . . . . . . . . . . . . . . . . . . .',
39065:'. . . . . . .s7p60 u uncollectibleamounts baddebts s7p3940 basisfor conclusions s7p126131 nonexchange revenue. . . . .',
39066:'. . . . . . . . . . . . . . . . . . . .',
39067:'. . . . . . .s7p56 understandability of information. . . . . . . . . . .',
39068:'. .c1p157159 unearnedrevenue s7p37 unemployment trust fund deposits by states. . . . . . . . . . .',
39069:'. . . . . . . . . . . . . . . . . . . .',
39070:'. . .s7p247 unreservedassertion definition . . . . . . . . . . . . . . .',
39071:'. . . . . . . . . . . . . . . . . . . .',
39072:'. . . . .s48p10 unused capacity costs . . . . . . . . . . . .',
39073:'. . . . . . . . . . . . s4p258263 users classifications of c1p7587 cost information. .',
39074:'. . . . . . . . . . . . . . . . . . . .',
39075:'. . . . . . . . . . . . s4p1821 users’ needs c1p88104 v veteransaffairs, department of',
39076:'lifeinsurance s5p110 medical care cost . . . . . . . . . . . . . . .',
39077:'. . . . . . . . . . . . . . . s5p182184 responsibility segments . .',
39078:'. . . . . . . . . . . . . . . . . . . .',
39079:'. . . . . . .s4p188 whole life policies. . . . . . . . . . .',
39080:'. . . . . . . . . . . . . . . . . . . .',
39081:'. . .s5p115 whole life, basis for conclusions . . . . . . . . . . . .',
39082:'. . . . . . s5p191193 w weapons system federal mission pp&e. . . . . . . .',
39083:'. . . . . . . . . . . . . . . . . . . .',
39084:'. s7p5051 appendixa page 16 fasabhandbook,version 2006/21 appendix b: effective dates of statements, interpretations, and technical releases statement of federal',
39085:'financial accountingconceptssffac sffac 1 objectives of federal financial reporting sffac 2 entity and display sffac3 management’s discussion andanalysis sffac4 intendedaudience',
39086:'andqualitative characteristics for the consolidated financial report of the united states government sffac5 definitions ofelements andbasic recognition criteria foraccrual basis',
39087:'financial statements sffac 6 distinguishing basic information, rsi, and oai sffac 7 measurement of the elements of accrualbasis financial statements',
39088:'in periods after initial recording sffac 8 federal financial reporting sffac 9 materiality: amending statement of federal financialaccounting concepts sffac',
39089:'1, objectives of federal financial reporting, and sffac 3, management’s discussion and analysis effective for fiscal statement of federal periods',
39090:'beginning after financial accountingstandards sffas sffas 1 accounting forassets and liabilities 9/30/93 sffas 2 accounting for direct loans and loan',
39091:'guarantees 9/30/93 sffas 3 accounting for inventory and related property 9/30/93 sffas 4 managerialcostaccountingstandards 9/30/97 sffas 5 accounting for liabilities',
39092:'of the federal government 9/30/96 sffas 6 accounting for property, plant, and equipment sffas 7 accounting for revenue and other',
39093:'financing sources and concepts for reconciling budgetary and financialaccounting sffas 8 supplementary stewardship reporting rescinded 9/30/2019 sffas 9 deferral of',
39094:'implementation date for sffas 4 sffas 10 accounting for internal use software sffas 11 amendments toaccountingfor pp&e—definitions—rescinded 9/30/2002 sffas 12',
39095:'recognition of contingent liabilities from litigation page 1 appendix b: effective dates fasab handbook, version 20 06/21 appendix b: effective',
39096:'dates effective for fiscal periods beginning after sffas 13 deferral of paragraph 65.2—material revenuerelated transactions disclosures 9/30/98 sffas 14 amendments',
39097:'to deferred maintenance reporting rescinded 9/30/2014 9/30/98 sffas 15 management’s discussion andanalysis 9/30/99 sffas 16 amendments toaccounting for property, plant,',
39098:'and equipment—multi use heritage assets rescinded 9/30/2005 9/30/99 sffas 17 accounting for social insurance 9/30/99 sffas 18 amendments toaccounting standards',
39099:'for direct loans and loan guarantees in statement of federal financial accounting standards no. 2 9/30/00 sffas 19 technical amendments',
39100:'toaccounting standards for direct and guaranteed loans 9/30/02 sffas 20 elimination of disclosures related to tax revenue transactions by the',
39101:'internal revenue service, customs and others 9/30/00 sffas 21 reporting corrections of errors and changes inaccounting principles 9/30/01 sffas 22',
39102:'change in certain requirements for reconciling obligations and net cost of operations rescinded 9/30/2018 9/30/00 sffas 23 eliminating the category',
39103:'national defense pp&e 9/30/02 sffas 24 selected standards for the consolidated financial report of the united states government 9/30/01 sffas',
39104:'25 reclassification of stewardship responsibilities and eliminating the current services assessment 9/30/02 sffas 26 presentation of significant assumptions for the',
39105:'statement of social insurance: amending sffas 25 9/30/2005 sffas 27 identifying and reporting earmarked funds 9/30/2005 sffas 28 deferral of',
39106:'the effective date of reclassification of the statement of social insurance: amending sffas 25 and 26 upon issuance sffas 29',
39107:'heritage assets and stewardship land 9/30/2005 sffas 30 interentity cost implementation:amending sffas 4, managerial cost accounting standards and concepts rescinded',
39108:'9/30/2018 9/30/2005 sffas 31 accounting for fiduciary activities 9/30/2008 sffas 32 consolidated financial report of the united states government requirements',
39109:'9/30/2005 sffas 33 pensions, other retirement benefits, and other postemployment benefits: reporting the gains and losses from changes in assumptions',
39110:'and selecting discount rates and valuation dates 9/30/2009 sffas 34 the hierarchy of generally accepted accounting principles, including the application',
39111:'of standards issued by the financial accounting standards board upon issuance page 2 appendix b: effective dates fasab handbook, version',
39112:'20 06/21 appendix b: effective dates effective for fiscal periods beginningafter sffas 35 estimating the historical cost of general property,',
39113:'plant, and upon issuance equipment amending statements of federal financialaccounting standards 6 and 23 rescinded 9/30/2016 sffas 36 reporting comprehensive',
39114:'longterm fiscal projections for the u.s. 9/30/2009 government sffas 37 socialinsurance:additionalrequirements for managements 9/30/2010 discussion andanalysis and basic financial statements',
39115:'sffas 38 accounting for federal oil and gas resources 9/30/2011 sffas 39 subsequentevents:codification ofaccounting andfinancial upon issuance reporting standards contained',
39116:'in the statements ofauditing standards sffas 40 definitional changes related to deferred maintenance and repairs: 9/30/2011 amending sffas 6,accounting for',
39117:'pp&e sffas 41 deferral ofthe effective date ofsffas 38,accountingfor federaloil upon issuance and gas resources sffas 42 deferredmaintenance andrepairs:amendingstatements offederal',
39118:'9/30/2014 financialaccounting standards 6, 14, 29, and 32 sffas 43 dedicatedcollections:amendingsffas 27,identifying and 9/30/2012 reporting earmarked funds sffas 44 accounting',
39119:'for impairment of general property, plant, and equipment 9/30/2014 remaining in use sffas 45 deferral of the transition to basic',
39120:'information for longterm upon issuance projections rescinded 10/17/2014 sffas 46 deferral of the transition to basic information for longterm upon',
39121:'issuance projections sffas 47 reporting entity 9/30/17 sffas 48 opening balances for inventory, operating materials and supplies, 9/30/16 and stockpile',
39122:'materials sffas 49 publicprivate partnerships: disclosures requirements 9/30/18 sffas 50 opening balances for general pp&e 9/30/16 sffas 51 insurance programs',
39123:'9/30/18 sffas 52 tax expenditures sffas 53 budget andaccrualreconciliation sffas 54 leases;anamendment ofsffas 5,accountingfor liabilitiesofthe 9/30/2023 federal government and sffas',
39124:'6,accounting for property, plant, and equipment sffas 55 amending interentity cost provisions 9/30/2018 sffas 56 classifiedactivities 9/30/2018 sffas 57 omnibusamendments2019',
39125:'multiple;seesffas 57 sffas 58 deferral of the effective date of sffas 54, leases upon issuance page 3 appendix b: effective',
39126:'dates fasab handbook, version 20 06/21 appendix b: effective dates effective for fiscal periods beginningafter sffas 59 accounting and reporting',
39127:'of government land the scope of this statement paragraphs 1 3 is effective for reporting periods beginning after september 30,',
39128:'2021. date interpretations issued i1 reportingonindiantrustfunds 3/12/97 i2 accountingfortreasuryjudgmentfundtransactions 3/12/97 i3 measurementdateforpensionandretirementhealthcareliabilities 8/29/97 rescinded 9/30/2009 i4 accounting for pension payments',
39129:'in excess of pension expense 12/19/97 i5 recognition by recipient entities of receivable nonexchange 12/98 revenue i6 accounting for imputed',
39130:'intradepartmental costs rescinded 6/00 9/30/2018 i7 items held for remanufacture 3/16/2007 i8 classifiedactivities 3/15/2019 i9 cleanup cost liabilities involving multiple',
39131:'component reporting 8/16/2019 entities:an interpretation of sffas 5 & sffas 6 i10 clarification of nonfederal nonentity fbwt classification sffas 1,',
39132:'5/10/2021 paragraph 31:an interpretation of sffas 1 and sffas 31 technical date bulletins issued 20001 federalaccountingstandardsadvisoryboardtechnicalbulletin 20001 20021 assigningtocomponententitiescostsandliabilitiesthatresultfrom legal',
39133:'claimsagainst the federal government 20022 disclosures required by paragraph 79g of sffas 7 9/1/02 20031 certainquestions andanswersrelatedtothehomelandsecurityact 6/1/03 of 2002',
39134:'20061 recognitionandmeasurement ofasbestosrelatedcleanupcosts 9/28/2006 20091 deferraloftheeffectivedateoftechnicalbulletin20061,recognition 9/22/2009 and measurement ofasbestosrelated cleanup costs 20111 accounting for federal natural resources other than',
39135:'oil and gas 9/30/2013 20112 extended deferral of the effective date of technical bulletin 20061, 11/22/2011 recognition and measurement ofasbestosrelated',
39136:'cleanup costs 20171 intragovernmentalexchangetransactions 11/1/2017 20172 assigningassets tocomponentreportingentities 11/1/2017 20201 lossallowancefor intragovernmentalreceivables 2/20/2020 page 4 appendix b: effective dates fasab',
39137:'handbook, version 20 06/21 appendix b: effective dates technical date releases issued tr1 audit legal letter guidance 3/1/98 tr2 environmental',
39138:'liabilities guidance 3/15/98 tr3 preparingandauditingestimatesfor direct andguaranteed 2/99 loanstr3: rescinded 1/22/2004 tr3 revised auditing estimates for direct loan and loan',
39139:'guarantee subsidies under the federal credit reformact – amendments to technical release no. 3 preparing and auditing direct loan and',
39140:'loan guarantee subsidies under the federal credit reform act tr4 reporting on nonvalued seized and forfeited property 7/31/99 tr5 implementationguidanceonsffas',
39141:'10:accountingfor internaluse 5/14/02 software – rescinded rescinded 1/19/2016 tr6 preparing estimates for direct loan and loan guarantee subsidies under the',
39142:'federal credit reformact – amendments to technical release no. 3 preparing and auditing direct loan and loan guarantee subsidies under',
39143:'the federal credit reform act tr7 clarification ofstandardsrelatingtothenationalaeronauticsand 5/25/2007 spaceadministrations space exploration equipment tr8 clarification of standards relating to inter',
39144:'entity costs rescinded 2/20/2008 1/15/2019 tr9 implementationguideforsffas29:heritageassetsandstewardship 2/20/2008 land tr10 implementationguidanceonasbestoscleanupcostsassociatedwith 6/2/2010 facilities and installed equipment tr11 implementationguidanceoncleanupcostsassociatedwith 6/2/2010 equipment',
39145:'tr12 accrual estimates for grant programs 8/4/2010 tr13 implementation guide for estimating the historical cost of general 6/1/2011 pp&e tr14',
39146:'implementationguidanceontheaccountingfor thedisposalof 10/6/2011 general property, plant & equipment tr15 implementation guidance for general property, plant, and equipment 9/26/2013 costaccumulation,assignment andallocation',
39147:'tr16 implementation guidance for internal use software 1/19/2016 tr17 conformingamendments totechnicalreleases 4/10/2017 tr18 implementation guidance for establishing opening balances 10/2/2017',
39148:'tr19 rescission of technical release 8 1/15/2019 staff implementationguidance date issued sig 23.1 guidance for implementing sffas 23, eliminating the',
39149:'category 1/31/2006 national defense pp&e: classification of items formerly considered national defense pp&e page 5 appendix b: effective dates fasab',
39150:'handbook, version 20 06/21 appendix b: effective dates staff implementationguidance date issued sig 31.1 guidance for implementation of sffac 31,',
39151:'accounting for fiduciary activities 3/19/2009 sig 6.1 clarification of paragraphs 4041 of sffas 6,accounting for property, plant, and equipment, as',
39152:'amended 7/17/2018 page 6 appendix b: effective dates fasab handbook, version 20 06/21 appendix c: memorandum of understandingamongthe governmentaccountability office,the',
39153:'departmentof the treasury, and the office of management and budget on federal governmentaccounting standardsandafederalaccounting standardsadvisory board this memorandum of understanding',
39154:'reflects the agreement of the governmentaccountability office “gao”, the department of the treasury “treasury”, and the office of management and',
39155:'budget “omb” on the procedures to be followed in setting federal government accounting standards and the composition and operation of',
39156:'the federalaccounting standardsadvisory board. whereas gao, treasury, and omb conduct a continuous program for improving accounting and financial reporting in',
39157:'the federal government; and whereasthecomptrollergeneral, the secretaryof thetreasury, andthe directorof the office of management and budget established an advisory board',
39158:'under the federaladvisory committee act, as amended 5 u.s.c.app., to consider and recommend accounting concepts and standards for the federal',
39159:'government; the comptroller general, the secretary of the treasury, and the director of the office of management and budget the',
39160:'sponsors each hereby agree to continue and serve as sponsors ofthefederalaccountingstandardsadvisoryboardboard. the board will workunder the general oversight of its',
39161:'sponsors. in addition, the sponsors each hereby agree to take related actions regarding federal government accounting standards. the board shall',
39162:'be established as follows: section 1. establishment. a. composition. the board shall have the following nine members: one gao member,',
39163:'one omb member, one treasury member, and six nonfederal members selected from the general financial community, the accounting and auditing',
39164:'community, and academia. b. selectionsandappointments. thegao,omb,andtreasurymemberswillbeselected by their respective agencies. the six nonfederal members will be selected by the sponsors.',
39165:'in selecting the nonfederal members, the sponsors shall: 1 seek nominations from a wide variety of sources; 2 consider, among',
39166:'other criteria, an individuals a broad professional background, and page 1 appendix c fasab handbook, version 20 06/21 appendix c',
39167:'b expertise in federal government accounting, financial reporting, and financial management; and 3 consider the recommendations of a panel convened',
39168:'by the chairperson. the sponsors will select a chairperson, who will be a nonfederal member. c. tenure. the gao, omb,',
39169:'and treasury members shall serve at the discretion of their respective agency heads. the six nonfederal members will serve initial',
39170:'terms of up to five years with a possible reappointment for one additional term of up to five years. d.',
39171:'duties. theboardwillconsideraccountingconceptsandstandards. theboardwillnot set or propose budget concepts, standards, and principles. in considering accounting conceptsandstandards,considerationwillbegiventothebudgetaryinformationneeds of executive agencies and the',
39172:'needs of users of federal financial information. board recommendations on accounting concepts or standards will be submitted to the comptroller',
39173:'general, the secretary of the treasury, the director of the office of management and budget, and the director of the',
39174:'congressional budget office. e. meetingsandagendas. theboard will meetwhenevernecessary or atthe request of thecomptrollergeneral, thesecretaryof thetreasury, or thedirector of omb, andwill',
39175:'establish detailed working procedures. board members will be expected to attend all meetings. f. funding. the sponsors shall share in',
39176:'funding the board on an equitable basis. section 2. support staff and other groups. a. staff. acore groupofqualifiedtechnical staffwill supporttheboardincarryingoutits',
39177:'duties and functions. the staff will spend its time working on board matters and, from time to time, may be',
39178:'augmented with staff assigned from government departments or agencies or other organizations. b. task forces. the board may appoint task',
39179:'forces as necessary to advise it on a variety of accounting matters. task forces will play an important role in',
39180:'the accounting standardsetting process. they will provide expert views and recommend solutions to issues or problems. section 3. accounting concept',
39181:'and standardsetting process. the board will follow a sixstep process for considering accounting concepts and standards. the steps in the',
39182:'process are: 1 identification of accounting issues and agenda decisions, page 2 appendix c fasab handbook, version 20 06/21 appendix',
39183:'c 2 preliminary deliberations, 3 preparation of initial documents issues papers and/or discussion memorandums, 4 release of documents to the',
39184:'public, public hearings, and considerations of comments, 5 further deliberations, exposure draft, and consideration of comments, and 6at least a',
39185:'twothirds majority vote reached among board members in favor of proposed concepts and standardssubmitted to the comptroller general, the secretary',
39186:'of the treasury, and the director of omb. the board will determine the detailed procedures necessary to implement these steps.',
39187:'section 4. concepts and standards. concepts and standards provide a frame of reference for resolving accounting issues. when the board',
39188:'has developed a proposed concept or standard, the board shall submit it to the comptroller general, the director of omb,',
39189:'and the secretary of the treasury for their review. if, within 90 days after its submission, the comptroller general or',
39190:'the director of omb, or both objects object to the concept or standard, then it shall not be issued and',
39191:'will be returned to the board for furtherconsideration; provided however, that the comptrollergeneralorthe directorof omb, may, in the event that',
39192:'unanticipated circumstances make it difficult for the comptroller general or the director of omb to complete the 90 day review',
39193:'timely, extend the review time for one additional90 dayperiod. if the comptroller general or the director of omb implementssuch an',
39194:'extension, he or she will notify the fasab chair. if neither the comptroller general nor the director of omb objects',
39195:'to the concept or standard during the review time provided in this paragraph, including any extension of the review time,',
39196:'then it shall be issued and become a final concept or standard of the board. concepts and standards will be',
39197:'announced in the federal register. aproposed interpretation or technical release shall be submitted to the members of the board representing',
39198:'the three sponsors for their review. if, within 45 days after its submission, any one of the members representing a',
39199:'sponsor objects to the proposed interpretation or technical release, then it shall be returned to the board forfurther consideration. if,',
39200:'within 45 daysafter its submission, none of these officialsobjectsto the interpretation ortechnical release, then it shall become final. final interpretations',
39201:'and technical releases will be announced in the federal register. the sponsors agree that standards set and promulgated following the',
39202:'board’s rules of procedure are recognized to have substantial authoritative support, and those accounting page 3 appendix c fasab handbook,',
39203:'version 20 06/21 appendix c standards contrary to such promulgation are not. the sponsors retain their authorities, separately and jointly,',
39204:'to establish and adopt accounting standards for the federal government. section 5. termination. any modification to this memorandum shall be',
39205:'effective if agreed to by each of the three signatory agencies. this memorandum shall remain in effect until 120 days',
39206:'after one of the sponsors provides notice of intent to terminate the agreement. section6. effectivedate. thismemorandumofunderstandingiseffectivewhenexecutedbythe sponsors. /s/ timothy f.',
39207:'geithner 12/3/2009 secretary of the treasury /s/ peter r. orszag 11/2/2009 director, office of management and budget /s/ gene l.',
39208:'dodaro 10/5/2009 acting comptroller general of the united states page 4 appendix c fasab handbook, version 20 06/21 appendix d:',
39209:'other federalaccounting andauditingresources for other helpful resources, see http://www.fasab.gov/resources/. page 1 appendix d fasab handbook, version 20 06/21 appendix e:',
39210:'consolidated glossary this glossary is a compilation of all terms presented in statements of federal financial accounting standards. some terms',
39211:'are designated as “special term from sffas ” and are terms defined specifically for the standard indicated. these terms are',
39212:'not intended for general application to other federal financial transactions. abandoned property property of any type over which the rightful',
39213:'owner has relinquished possession and any claim of an ownership interest, without assertion of an adverse right to possession and',
39214:'control by the federal government. this would include property left at a government facility and unclaimed by the rightful owner',
39215:'following notice of intent to dispose. this property is a type of seized property. abatement areduction or cancellation of an',
39216:'assessed tax. accountability reports these reports are broader in scope than traditional general purpose financial reports. as explained by omb:',
39217:'“six pilot agencies volunteered to produce an ‘accountability report’ for fy 1995 to provide more useful information to decision makers',
39218:'by linking together information required by several management statutes. . . .accountability reports integrate the following information: the fmfiareport, the',
39219:'cfosactannual report including audited financial statements; management’s report on finalaction as required by the igact; civil monetary penalty and prompt',
39220:'paymentact reports; and available information on agency performance compared with its stated goals and objectives, in preparation for implementation of',
39221:'gpra.” federal financial management status report and five year plan, june 1996, pages 3334. twelve agencies produced accountability reports for',
39222:'fy 1997; eighteen plan to do so for fy 1998; the number will increase to 23 for fy 2000. the',
39223:'requirement to include civil monetary penalty and prompt paymentact reports has been deleted. accrualaccounting records the effects on a reporting',
39224:'entity of transactions and other events and circumstances in the periods in which those transactions, events, and circumstances occur rather',
39225:'than only in the periods in which cash is received or paid by the entity. accrual accounting is concerned with',
39226:'an entity’s acquiring of goods and services and using them to produce and distribute other goods page 1 appendix e',
39227:'fasab handbook, version 20 06/21 appendix e and services. it recognizes that the buying, producing, selling, distributing, and other operations',
39228:'of an entity during a period, as well as other events that affect entity performance, often do not coincide with',
39229:'the cash receipts and payments of the period. compare with cash accounting. [see financialaccountingstandardsboard statementoffinancialaccounting conceptssfac no. 4, objectives of',
39230:'financial reporting by nonbusiness organizations, paragraph 50, sfac no. 6, elements of financial statements, pars. 139141, 1445; and congressional budget',
39231:'office, glossary of budgetary and economic terms, “accrualaccounting.”] sffas 24 acres of land held for disposal or exchange land for',
39232:'which the entity has satisfied the statutory disposal authority requirements specific to the land in question. disposal includes conveyances of',
39233:'federal land to nonfederal entities not limited to sale, transfer, exchange, lease, publicprivate partnership, and donation or any combination thereof.',
39234:'activity the actual work task or step performed in producing and delivering products and services. an aggregation of actions performed',
39235:'within an organization that is useful for purposes of activity based costing. activityanalysis theidentification anddescription of activities inan organization. activity',
39236:'analysis involves determining what activities are done within a department, how many people perform the activities, how much time they',
39237:'spend performing the activities, what resources are required to perform the activities, what operational data best reflect the performance of',
39238:'the activities, and what customer value the activity has for the organization. activity analysis is accomplished with interviews, questionnaires, observation,',
39239:'and review of physical records of work. it is the foundation for agency process value analysis, which is key to',
39240:'overall review of program delivery. activitybased costing acost accounting method that measures the cost and performance of process related activities',
39241:'and cost objects. it assigns cost to cost objects, such as products or customers, based on their use of activities.',
39242:'it recognizes the causal relationship of cost drivers to activities. page 2 appendix e fasab handbook, version 20 06/21 appendix',
39243:'e actual cost an amount determined onthebasisof cost incurred including standard cost properlyadjusted for applicable variance. actual custody physical possession',
39244:'and control of property by government personnel. actuarial balance the difference between the summarized cost rate and the summarized income',
39245:'rate over a given valuation period. actuarial cost methods arecognized actuarialtechnique usedfor establishing theamount and the incidence ofemployer contributions or',
39246:'accounting charges for pension costs under a pension plan. actuarial gains and losses achange in the value of an estimated',
39247:'liability or the benefit plans assets resulting from experience different from that assumed or from a change in an actuarial',
39248:'assumption. past experience is reflected in current costs through actuarial gains and losses. actuarial liability aliability based on statistical calculations',
39249:'and actuarial assumptions actuarial assumptions are conditions used to resolve uncertainties in the absence of information concerning future events affecting',
39250:'insurance, pension expenses, etc.. page 3 appendix e fasab handbook, version 20 06/21 appendix e actuarial present value the value',
39251:'of an amount or series of amounts payable or receivable at various times, determined as of a given date by',
39252:'the application of a particular set of actuarial assumptions. actuarial standards of practice no. 4 actuarial status the status of',
39253:'a program based on statistical calculations and actuarial assumptions about future economic, demographic, and other conditions and events. adverse event',
39254:'may be a singleoccurring event or a series of events that cause losses to the beneficiary or beneficiaries as identified',
39255:'in the insurance arrangement. aggregate entryage normal asystem of applying the entry age normal actuarial cost methodology using aggregate population',
39256:'models or groups instead of applying it individual by individual. allocations as used in the context of the federal budget,',
39257:'the amount of obligationalauthoritytransferred from one agency, bureau, or account that is set aside in a transfer appropriation account to',
39258:'carry out the purpose of the parent appropriation or fund. jfmip, project on standardization of basic financial information requirements of',
39259:'central agencies, dated october 1991, hereafter cited as jfmip standardization project allotment adistribution made within an entity of amounts available',
39260:'for obligation. [see omb bulletina34, instructions on budget execution, section 11, terms and concepts, “allotment.”] page 4 appendix e fasab',
39261:'handbook, version 20 06/21 appendix e ammunition ageneric term that includes a great variety of devices designed and constructed to',
39262:'inflict damage upon enemy personnel or material by action of an explosive, pyrotechnic, or chemical agent. amortization the gradual extinguishment',
39263:'of any amount over a period of time through a systematic allocation of the amount over a number of consecutive',
39264:'accounting periods such as the retirement of a debt by serial payments to a sinking fund. annual cost increment the',
39265:'annual cost increment component of expense is the actuarial present value of the future cash outflows for which a reporting',
39266:'entity becomes obligated during the reporting period. see normal cost below for pensions, orb, and opeb. anticipated the word “anticipated”',
39267:'is used in a broad, generic sense in this document. in this context the term may encompass both “probable” losses',
39268:'arising from events that have occurred, which should be recognized on the face of the basic or “principal” financial statements,',
39269:'as well as “reasonably possible” losses arising from events that have occurred, which should be disclosed in notes to those',
39270:'statements. “anticipated” may include the effects of future events that are deemed probable, for which a financial forecast would be',
39271:'appropriate. the term may also encompass hypothetical future trends or events that are not necessarily deemed probable, for which financial',
39272:'projections may be appropriate. see below for definitions of “forecast” and “projection.” applied research systematic study to gain knowledge or',
39273:'understanding necessary for determining the means by which a recognized and specific need may be met. page 5 appendix e',
39274:'fasab handbook, version 20 06/21 appendix e apportionment adistribution made by omb of amounts available for obligation in an appropriation',
39275:'or fund account into amounts available for specified time periods, programs, activities, projects, objects, or combinations thereof. the apportioned amount',
39276:'limits the obligations that may be incurred. omb circular a34 appropriation in most cases, appropriations are a form of budget',
39277:'authority provided by law that permits federal agencies to incur obligations and make payments out of the treasury for specified',
39278:'purposes. an appropriation usually follows enactment of authorizing legislation. an appropriation act is the most common means of providing budget',
39279:'authority, but in some cases the authorizing legislation itself provides the budget authority. arrangement period is the period over which',
39280:'adverse events that occur are covered. assessments enforceable claims for nonexchange revenue for which specific amounts due have been determined',
39281:'and the person from whom the tax or duty is due has been identified. they include both selfassessments made by',
39282:'persons filing tax returns and assessments made by the collecting entitiesasaresult of audits, investigations, and litigation.although the termis normally used',
39283:'in connection with taxes, as used in this statement sffas 7 assessments also include determinationsof amountsdueforanyother kindofnonexchangerevenue. specificallyexcluded from the',
39284:'definition of assessments, as used in this statement, are compliance assessments. compliance assessments, as defined by irs and customs, do',
39285:'not represent financial receivables. assets aresource that embodies economic benefits or services that the federal government controls. page 6 appendix',
39286:'e fasab handbook, version 20 06/21 appendix e attribution the process of assigning pension benefits or costs to periods of',
39287:'employee service. [financial accounting standard board, statement of financialaccounting standard no. 87, employers’ accounting for pensions ] assumptions basic beliefs',
39288:'about the future operating and functional characteristics. types of assumptions include: actuarial:assumptions as to the occurrence of future events affecting',
39289:'projected costs, such as mortality, withdrawal, disability, and future interest rates. cash flow assumptions all known and/or forecasted information about',
39290:'the characteristics and performance of a cash flow, e.g., a loan or group of loans or loan guarantees. examples of',
39291:'assumptions pertaining to loans and loan guarantees include estimates of maturity, borrower interest rate, default/delinquency rate, timing of defaults, overall',
39292:'impact of changes in economic factors, etc. hospital assumptions: assumptions related to medical treatment including differentials between hospital labor and',
39293:'nonlabor indices compared to general economy labor and nonlabor indices; rates of hospital admission; the trend toward treating less complicated',
39294:'cases in outpatient settings; and continued improvement in the classification of patients according to type of treatment, age, diagnosis, etc.',
39295:'key assumptions assumptions that have been established, through sensitivity analysis or other means, to be the elements that have a',
39296:'large impact on estimates, and thus are the most important factors in determining the cost of a loan or group',
39297:'of loans or loan guarantees. model assumptions determinations of how cash flow assumptions are applied through the life of the',
39298:'cohort. for example, determining whether the entire assumed amount of defaults should be applied in 1 year or whether a',
39299:'constant or variable proportion of the assumption value should be allocated to each year. the allocation of cash flows over',
39300:'time is the selected model form and is just as influential as the cash flow assumption. social security: values relating',
39301:'to future trends in certain key factors. demographic assumptions include fertility, mortality, net immigration, marriage, divorce, retirement patterns, disabilityincidenceand terminationrates,andchangesin',
39302:'thelaborforce. economicassumptions include unemployment, average earnings, inflation, interest rates, and productivity. projections page 7 appendix e fasab handbook, version 20',
39303:'06/21 appendix e are normallyprovidedbasedonthe following threesetsof economicassumptionsthe “lowcost” set alternative i that assumes relatively rapid economic growth, low inflation,',
39304:'and demographic conditions favorable to the plan; the “intermediatecost” setalternativeiithatrepresentsthetrustees’ “bestestimate” of future trends; and the “high cost” set alternative',
39305:'iii that assumes slow economic growth, more rapid inflation, and demographic conditions unfavorable to the plan. authority to borrow authority',
39306:'to borrow is a subset of budget authority. see budget authority. avoidable cost acost associated with an activity that would',
39307:'not be incurred if the activity were not performed. baseline provisions baseline provisions are the starting points used to measure',
39308:'the impact of tax expenditures on tax revenues as compared to revenues that would be collected otherwise, absent the special',
39309:'exclusion, exemption, deduction, credit, preferential rate, or deferral. certain practical aspects of the code are incorporated into the baselinesuch as',
39310:'progressive tax rates, personal exemptions, standard deductions, deductions of expenses incurred in order to earn income, and deferrals of unrealized',
39311:'income. basic financial statements asusedinsffas7, the basicfinancial statementsare those onwhichanauditorwould normally be engaged to express an opinion. the term “basic”',
39312:'does not necessarily mean that other financial information not covered by the auditor’s opinion is less important to users than',
39313:'that contained in the basicstatements; it merely connotesthe expected nature of the auditor’s review of, and association with, the information.',
39314:'the basic financial statements in financial reports prepared pursuant to the chief financial officersact, as amended, are called the “principal',
39315:'financial statements.” the form and content of these statements are determined by omb. see also principal financial statements page 8',
39316:'appendix e fasab handbook, version 20 06/21 appendix e basic information information that isessential for financial statementsand notesto be presented',
39317:'in conformity with generally accepted accounting principles gaap. basic research systematicstudyto gain knowledge or understanding of the fundamentalaspects of phenomena',
39318:'and of observable facts without specific applications toward processes or products in mind. beneficiary an individual or other entity legally',
39319:'entitled to enforce an obligation against the united states such as specified benefits from a fiduciary trust or agent. betterment',
39320:'an expenditure having the effect of extending the useful life of an existing asset, increasing its normal rate of output,',
39321:'lowering its operating cost, increasing rather than merely maintaining its efficiency or otherwise adding to the worth of benefits it',
39322:'can yield. abetterment is distinguished from repair or maintenance in that the latter have the effect of merely keeping the',
39323:'asset in its customary state of operating efficiency without the expectation of added future benefits. black lung benefits program the',
39324:'black lung program consists of two parts: part b and part c. recipients who filed claims from 1970 to mid1973',
39325:'are covered by part b; all other recipients are covered by part c. partbiscurrentlyadministeredbythesocialsecurityadministrationssa. former coal miners and their dependents',
39326:'are eligible for monthly cash benefits if the miner is totally disabled or died due to black lung disease. benefits',
39327:'under part b are reduced if the beneficiary receives state workers’compensation, unemployment compensation, or state disability compensation. certain pension benefits',
39328:'are subject to an excessearnings test. the program is wholly funded by annual appropriations from the general fund. part c',
39329:'is administered by the u.s. labor department, although some services are provided by ssaon a reimbursable basis. the program serves',
39330:'a declining population. page 9 appendix e fasab handbook, version 20 06/21 appendix e increased mechanization of coal mining operations',
39331:'and the industry’s improved health and safety regulations have resulted in very few new entrants into the program. most current',
39332:'beneficiaries entered the program in the 1970s. former coal miners who have black lung disease are eligible for part c',
39333:'benefits if a responsible mine owner cannot be determined. twothirds of part c benefits are funded by earmarked excise taxes',
39334:'on coal and onethird by general fund revenues. the latter takes the form of “repayable advances” rather than appropriations. book',
39335:'value the net amount at which an asset or liability is carried on the books of account also referred to',
39336:'ascarrying valueoramount. it equalsthegrossornominalamount of anyasset or liabilityminus any allowance or valuation amount. budget the budget of the united states',
39337:'government setting forth the president’s comprehensive financial plan for allocating resources. the government uses the budget system to allocate resources',
39338:'among its major functions and individual programs. the budget process has three main phases: formulation, congressional action on the budget,',
39339:'and execution. some presentationsinthebudgetdistinguishbetween “onbudget” and “offbudget” totals. “onbudget” totals reflect the transactions of all government entities except those excluded',
39340:'from the unified budget totals by law. likewise, “offbudget” totals reflect the transactions of government entities thatareexcludedfromtheunifiedbudgettotalsbylaw. currentlyexcludedarethesocialsecurity trust funds',
39341:'and the postal service fund. the onand offbudget totals are combined to derive unified or consolidated totals for federal activity.',
39342:'the budget amounts and references in this exposure draft refer to the unified budget. [see fy 2003 budget of the',
39343:'united states government: analytical perspectives, “budget system and concepts and glossary.”] budgetauthority the authorityprovided byfederal lawto incur financial obligationsthat willresult',
39344:'in immediate or future outlays. specific forms of budget authority include: appropriations which may be provided in appropriations acts or',
39345:'other laws and which permit obligations to be incurred and payments to be made; borrowing authority which permits obligations to',
39346:'be incurred but requires funds to be borrowed to liquidate the obligation; page 10 appendix e fasab handbook, version 20',
39347:'06/21 appendix e contract authority which permits obligations to be incurred but requires a subsequent appropriation or offsetting collections to',
39348:'liquidate the obligations; and spending authority from offsetting collections which permits offsetting collections to be credited to an expenditure account',
39349:'and permits obligations and payments to be made using the offsetting collections the offsetting collections credited to an account are',
39350:'deducted from gross budget authority of the account. budget authority may be classified by period of availability one year, multipleyear,',
39351:'or no year, by nature of the authority current or permanent, by the manner of determining the amount available definite',
39352:'or indefinite, or as gross without reduction of offsetting collections and net with reductions of offsetting collections. omb circular a11,',
39353:'preparation and submission of budget estimates, executive office of the president, office of management and budget, hereafter cited as omb',
39354:'circular a11; omb, the budget system and concepts; and gao, a glossary of terms used in the federal budget process,exposure',
39355:'draft,january1993;hereafter referred to as gao budget glossary. budget obligation see obligation below. budget outlay see outlay below. budget receipt see',
39356:'receipt below. budget surplus or deficit, unified the unified budget surplus is the excess of budget receipts over budget outlays',
39357:'during a fiscal year and a deficit is the excess of budget outlays over budget receipts during a fiscal year.',
39358:'[see fy 2003 budget of the united states government: analytical perspectives, “budgetsystem and concepts and glossary.”] sffas 24 page 11',
39359:'appendix e fasab handbook, version 20 06/21 appendix e budget, unified the budget presents combined onand offbudget totals to derive',
39360:'totals for federal activity, which is sometimes called the unified budget. the offbudget receipts and outlays of the social securitytrust',
39361:'fundsand thepostal servicefund are addedtothe onbudget receiptsand outlays to calculate the unified budget totals. budgetaryaccounting budgetary accounting is the system',
39362:'that measures and controls the use of resources according to the purposes for which budget authority was enacted; and that',
39363:'records receipts and other collections by source. it tracks the use of each appropriation for specified purposes in separate budget',
39364:'accounts through the various stages of budget execution from appropriation to apportionment and allotment to obligation and eventual outlay. this',
39365:'system is used by the congress and the executive branch to set priorities, to allocate resources among alternative uses, to',
39366:'finance these resources, and to assess the economic implications of federal financial activity at an aggregate level. budgetary accounting is',
39367:'used to comply with the constitutional requirement that “no money shall be drawn from the treasury, but in consequence of',
39368:'appropriations made by law; and a regular statement andaccount of the receipts and expendituresof allpublicmoneyshallbepublished fromtimetotime.” see statementof federal financialaccounting',
39369:'concepts no. 1, objectives of federal financial reporting, september 1993, paragraphs 4546, 112114, and 186191. budgetary resources the forms of',
39370:'authority given to an agency allowing it to incur obligations. budgetary resources include the following: new budget authority, unobligated balances,',
39371:'direct spending authority, and obligation limitations. gao budget glossary business typeactivity significantly selfsustaining activity which finances its continuing cycle of',
39372:'operations through collection of exchange revenue. page 12 appendix e fasab handbook, version 20 06/21 appendix e capital leases leases',
39373:'that transfer substantially all the benefits and risks of ownership to the lessee. [this definition will be rescinded when sffas',
39374:'54, leases, becomes effective for reporting periods beginning after september 30, 2020. early adoption is not permitted.] capitalize to record',
39375:'and carry forward into one or more future periods any expenditure the benefits or process from which will then be',
39376:'realized. cashaccounting asystem of accounting in which revenues are recorded when received in cash and expenses or expenditures are recorded',
39377:'when cash is disbursed. [see financialaccounting standards board statement of financialaccounting concepts no. 4, objectives of financial reporting by nonbusiness',
39378:'organizations, paragraph 50; and congressional budget office, glossary of budgetary and economic terms, “cashaccounting.”] sffas 24 cash flow stream the',
39379:'agency’s projection of the dollar amount for the scheduled cash flows and deviations from scheduled cash flow items for each',
39380:'year, e.g., over the life of a cohort of loans. cash flows estimates or payments to or from the government.',
39381:'for example, for direct loans, these may include: loan disbursements, repayments of principle, payments of interest, and any other payments',
39382:'such as defaults, prepayments, fees, penalties, and other recoveries. for loan guarantees, these may include: payments by the government to',
39383:'cover defaults and delinquencies, interest subsidies, payments to the government, such as origination and other fees, penalties and recoveries, and',
39384:'any other payments. page 13 appendix e fasab handbook, version 20 06/21 appendix e cash surrender value is the sum',
39385:'of moneyan insurance companywillreturn to the policyholderif thepolicyiscanceled before its maturity or the insured event death occurs. category i nonfriable',
39386:'asbestoscontaining material acm refers to asbestoscontaining packings, gaskets, resilient floor covering, and asphalt roofing products containing more than 1 percent',
39387:'asbestos as determined using the method specified in appendix e, subpart e, 40 cfr part 763, section 1, polarized light',
39388:'microscopy. 40 cfr § 61.141 category ii nonfriableacm refers to any material, excluding category i nonfriableacm, containing more than 1',
39389:'percent asbestos as determined using the methods specified in appendix e, subpart e, 40 cfr part 763, section 1, polarizedlight',
39390:'microscopythat, when dry, cannot be crumbled, pulverized, orreduced to powder by hand pressure. 40 cfr § 61.141 central fund afederal',
39391:'entity established to finance the costs of seizure, management and disposition of property seized for forfeiture, and to receive any',
39392:'proceeds from the sale or other disposition of that property. changes inaccounting principles achangein accountingprinciple isa change fromone generallyaccepted accounting',
39393:'principle to another one that can be justified as preferable. for the purposes of sffas 21, changes in accounting principles',
39394:'also include those occasioned by the adoption of new federal financial accounting standards. sffas 21 page 14 appendix e fasab',
39395:'handbook, version 20 06/21 appendix e claimadjustment expenses cae are incremental costs directly attributable to investigating, settling, and/or adjusting claims.',
39396:'an incrementalcostisone that can result onlywhenclaimshavebeen incurred. caeincludebut are not limited to legal and adjusters fees. cae may be incurred',
39397:'through work performed by federal employees and/or contractors. classified national security information also known as classified information, is any information',
39398:'that has been determined pursuant to executive order e.o. 13526, as amended; or any successor orders, to require protection against',
39399:'unauthorized disclosure and is marked to indicate its classified status. information may be classified at one of the following three',
39400:'levels: top secret, which is applied to information, the unauthorized disclosure of which reasonably could be expected to cause exceptionally',
39401:'grave damage to the national security that the original classification authority is able to identify or describe; secret, which is',
39402:'applied to information, the unauthorized disclosure of which reasonably could be expected to cause serious damage to the national security',
39403:'that the original classification authority is able to identify or describe; and confidential, which is applied to information, the unauthorized',
39404:'disclosure of which reasonably could be expected to cause damage to the national security that the original classification authority is',
39405:'able to identify or describe. cleanup costs the costs of removing, containing, and/or disposing of 1 hazardous waste from property,',
39406:'or 2 material and/or property that consists of hazardous waste at permanent or temporary closure or shutdown of associated pp&e.',
39407:'closed group see “closed group to new entrants.” page 15 appendix e fasab handbook, version 20 06/21 appendix e closed',
39408:'group to new entrants those persons who, as of a valuation date, are participants in a social insurance program as',
39409:'beneficiaries, covered workers, or payers of earmarked taxes or premiums. cohort those direct loans obligated or loan guarantees committed by',
39410:'a program in the same year even if disbursements occur in subsequent years. post1991 direct loans or loan guarantees will',
39411:'remain with their original cohort throughout the life of the loan, even if the loan is modified. pre1992 loans and',
39412:'loan guarantees that are modified shall each, respectively, constitute a single cohort. omb circular a11 collateral real or personal property',
39413:'pledged as part or full security on a debt. collections amounts received by the federal government during the fiscal year.',
39414:'collections are classified as follows:budget receipts or offbudget receipts are collections from the public based on the government’s exercise of',
39415:'its sovereign powers, including collections from participants in compulsory social insurance programs. offsetting collections are collections from government accounts intragovernmental',
39416:'transactions or from the public that are offset against budget authority and outlays rather than reflected as receipts in computing',
39417:'the budget and offbudget totals. they are classified as a offsetting receipts i.e., amounts deposited to receipt accounts, and b',
39418:'collections credited to appropriation or fund accounts. the distinction between these two majorcategoriesisthatcollectionscreditedtoappropriationorfund accountsare offset withinthe account that contains the',
39419:'associated disbursements outlays, whereas offsetting receipts are in accounts separate from the associated disbursements. offsetting collections are deducted from gross',
39420:'disbursements in calculating net outlays. based on a glossary of terms used in the federal budget process; and related accounting,',
39421:'economic, and tax terms, third edition, generalaccounting office, march 1981. page 16 appendix e fasab handbook, version 20 06/21 appendix',
39422:'e commercial use land land or permanent land rights that are predominantlyused to generateinflows of resourcesfrom nonfederal third parties, usually',
39423:'through special use permits, rightofway grants, and leases. such inflows may arise from exchange or nonexchange activities and may or',
39424:'may not be considered dedicated collections. [see sffas 6 paragraph 20b. for example commercial use land sources from which revenue',
39425:'or inflows are derived.] common cost the cost of resources employed jointly in the production of two or more outputs',
39426:'and the cost cannot be directly traced to any one of those outputs. common data source all of the financial',
39427:'and programmatic information available for the budgetary, cost, and financial accounting processes. it includes all financial and much nonfinancial data,',
39428:'such as environmental data, that are necessary for budgeting and financial reporting as well as evaluation and decision information developed',
39429:'as a result of prior reporting and feedback. component entities the term “component entity” is used to distinguish between the',
39430:'u.s. federal government and its components. the u.s. federal government as a whole is composed of organizations that manage resources',
39431:'and are responsible for operations, i.e., delivering services. these include major departments and independent agencies, which are generally divided into',
39432:'suborganizations, i.e., smaller organizational units with awide varietyof titles, including bureaus, administrations, agencies, and corporations. sffac no. 2, entity and',
39433:'display, pars. 1112. use of “component entity” in this standard is only intended to distinguish between the u.s. federal government’s',
39434:'consolidated financial statements and financial statements of its components. page 17 appendix e fasab handbook, version 20 06/21 appendix e',
39435:'component reportingentity “component reporting entity is used broadlyto referto a reporting entitywithin a larger reporting entity.1 examples of component reporting',
39436:'entities include organizations such as executive departments, independent agencies, government corporations, legislative agencies, and federal courts. component reporting entities would',
39437:'also include subcomponents those components included in the gpffr of a larger reporting entity that may themselves prepare gpffrs. one',
39438:'example is a bureau that is within a larger department that prepares its own standalone gpffr. composite depreciation methodology the',
39439:'compositemethodologyisa methodof calculating depreciationthatappliesa singleaverage rate to a number of heterogeneous assets that have dissimilar characteristics and service lives. condition',
39440:'the physical state of an asset. the condition of an asset is based on an evaluation of the physical status/state',
39441:'of an asset, its ability to perform as planned, and its continued usefulness. evaluating an asset’sconditionrequiresknowledgeof the asset, itsperformance capacityand',
39442:'its actual ability to perform, and expectations for its continued performance. the condition of a long lived asset is affected',
39443:'by its durability, the quality of its design and construction, its use, the adequacy of maintenance that has been performed,',
39444:'and manyother factors, including: accidents an unforeseen and unplanned or unexpected event or circumstance, catastrophes a tragic event, disasters a',
39445:'sudden calamitous event bringing great damage, loss, or destruction, and obsolescence. conditionassessment surveys periodic inspections of pp&e to determine their',
39446:'current condition and estimated cost to correct any deficiencies. 1the larger reporting entity could be the governmentwide reporting entity or',
39447:'another component reporting entity. page 18 appendix e fasab handbook, version 20 06/21 appendix e conservation and preservation land land',
39448:'or permanent land rights that are predominantly used for conservation or preservation purposes. conservation and preservation, although closely linked, are',
39449:'distinct terms. each term involves a certain type or degree of protection. specifically, conservation is generally associated with the protection',
39450:'and proper use of natural resources, whereas preservation is associated with the protection of buildings, objects, and landscapes from use.',
39451:'[see sffas 6 paragraph 20c. for examples of land conserved or preserved for significant natural, historic, scenic, cultural, and recreational',
39452:'resources.] conservatorship aconservatorship isthe legalprocessinwhicha personorentityisappointed to establishcontrol and oversight of a company to put it in a sound and',
39453:'solvent condition. in a conservatorship, the powers of the company’s directors, officers, and shareholders are transferred to the designated conservator.2',
39454:'constant dollar adollar value adjusted for changes in the average price level. aconstant dollar is derived by dividing a current',
39455:'dollar amount by a price index. the resulting constant dollar value isthat which would exist if prices had remained at',
39456:'the same average level as in the base period.any changes in such constant dollar values would therefore reflect only changes',
39457:'in the real volume of goods and services, not changes in the price level. constant dollar figures are commonly used',
39458:'to compute the real value of the gross domestic product and its components and to estimate the real level of',
39459:'federal receipts and outlays. gao budget glossary constructive custody legal possession of property by federal government personnel through a nonfederal',
39460:'agent, such as a commercial contractor or state or local official, under a legal agreement or court order 2 federal',
39461:'housing financeagency fact sheet, questions andanswers on conservatorship page 19 appendix e fasab handbook, version 20 06/21 appendix e that',
39462:'theagent maintainsphysicalpossession andcontrolofthe propertyonbehalf of, andsubject to the orders of, the federal government personnel. consumption method amethod of accounting for',
39463:'goods, such as materials and supplies, where the goods are recognized as assets upon acquisition and are expensed as they',
39464:'are consumed. contingency an existing condition, situation, or set of circumstances involving uncertainty as to possible gain or loss to',
39465:'an entitythat will ultimately be resolved when one or more future eventsoccur or fail to occur. contraaccount one of two',
39466:'or more accounts which partially or wholly offset another or other accounts; on financial statements, they may be either merged',
39467:'or appear together. contractauthority contract authority is a subset of budget authority. see budget authority. contributions also referred to as',
39468:'“taxes,” “payroll taxes,” or “premiums,” these terms refer to amounts paid into social insurance programs. the payments can be paid',
39469:'by 1 employers and employees based on wages from employment covered under a program; 2 the selfemployed based on net',
39470:'earnings from selfemployment; 3 governments based on wages of state and local government employees; and 4 policyholders based on coverage',
39471:'under certain programs. control with risk of loss or expectation of benefit control with riskof loss or expectation of benefit',
39472:'isthe power to impose will on and/or govern the financial and/or operating policies of another organization with the potential to',
39473:'be obligated to provide financial support or assume financial obligations or obtain financial resources or non financial benefits.3 page 20',
39474:'appendix e fasab handbook, version 20 06/21 appendix e controllable cost acost that can be influenced by the action of',
39475:'theresponsible manager. the termalwaysrefersto a specified manager since all costs are controllable by someone. cost defined in sffac no. 1,',
39476:'objectives of federal financial reporting as the monetary value of resources used para. 195. defined more specifically in sffas no.',
39477:'4, managerial cost accounting concepts and standards for the federal government, as the monetary value of resources used or sacrificed',
39478:'or liabilities incurred to achieve an objective, such as to acquire or produce a good or to perform an activity',
39479:'or service page 105. depending on the nature of the transaction, cost may be charged to operations immediately, i.e., recognized',
39480:'as an expense of the period, or to an asset account for recognition as an expense of subsequent periods. in',
39481:'most contexts within accounting for revenue and other financing sources, “cost” is used synonymously with expense. see also “full cost.”',
39482:'costallocation amethod of assigning costs to activities, outputs, or other cost objects. the allocation base used to assign a cost',
39483:'to objects is not necessarily the cause of the cost. for example, assigning the cost of power to machine activitiesbymachine',
39484:'hoursisan allocation becausemachinehoursare an indirect measure of power consumption. costassignment aprocess that identifies costs with activities, outputs, or other cost',
39485:'objects. in a broad sense, costs can be assigned to processes, activities, organizational divisions, products, and services. there are three',
39486:'methods of cost assignment: a directly tracing costs wherever economically feasible, b causeandeffect, and c allocating costs on a reasonable',
39487:'and consistent basis. 3 for example, a nonfinancial benefit would be one where the federal government benefits from a service',
39488:'being provided to it or on its behalf. page 21 appendix e fasab handbook, version 20 06/21 appendix e costbenefitanalysis',
39489:'the weighing of benefits against costs usually expressed as a ratio of dollar benefits to dollar costs for each of',
39490:'a variety of alternatives to provide a comparable basis of choice among them. cost driver any factor that causes a',
39491:'change in the cost of an activity or output. for example, the quality of partsreceived byanactivity,orthe degree of complexityoftaxreturnstobereviewed bythe',
39492:'irs. cost finding cost finding techniques produce cost data by analytical or sampling methods. cost finding techniques are appropriate for',
39493:'certain kinds of costs, such as indirect costs, items with costs below set thresholds within programs, or for some programs',
39494:'in their entirety. cost finding techniques support the overall managerial cost accounting process and can represent nonrecurring analysis of specific',
39495:'costs. cost object also referred toas cost objective an activity, output, or item whose cost is to be measured. in',
39496:'a broad sense, a cost object can be an organizational division, a function, task, product, service, or a customer. cost',
39497:'rate the ratio of expenditures for the program to the taxable payroll for the year. covered employment all employment and',
39498:'selfemployment creditable for purposes of the social insurance program. for social security, almost every kind of employment and selfemployment is',
39499:'covered. in a few employment situations, coverage must be elected by the employer. covered employment for hi includes all federal',
39500:'employees, whereas covered employment for oasdi includes some, but not all, federal employees. page 22 appendix e fasab handbook, version',
39501:'20 06/21 appendix e covered worker aperson having earnings creditable for a social insurance program. for social security, “creditable earnings”',
39502:'are based on earnings taxable under the program. the number of hi covered workers is slightly larger than the number',
39503:'of oasdi covered workers because of different coverage status for federal employment. credit program for the purpose of this statement',
39504:'sffas 19, a federal program that makes loans and/or loan guarantees to nonfederal borrowers. current discount rate with respect to',
39505:'the modification of direct loans or loan guarantees, it is the discount rate used to measure the cost of a',
39506:'modification. it is the interest rate applicable at the time of modification on marketable treasury securities with a similar maturity',
39507:'to the remaining maturity of the direct or guaranteed loans, under either premodification terms, or postmodification terms, whichever is appropriate.',
39508:'[special term from sffas 2] current liabilities amounts owed by a federal entity for which the financial statements are prepared,',
39509:'and which need to be paid within the fiscal year following the reporting date. current servicesassessment projections of future receipts',
39510:'and outlays from future activities based on the programs established by current law. the csafocuses on the totality of government',
39511:'operations rather than on individual programs, and shows the shortand longterm direction of current programs. current policy without change in',
39512:'federal financial reporting, current policywithout change refers to the continuation of policies in place as of the valuation date in',
39513:'other words, no policy change. page 23 appendix e fasab handbook, version 20 06/21 appendix e custodialagency the federal agency',
39514:'that has actual possession of seized or forfeited property, or constructive possession of property through a nonfederal agent. the custodial',
39515:'agency would be responsible for reporting material quantities of nonvalued items. debttogdp ratio the debttogdp ratio, for the purposes of',
39516:'federal financial reporting, is the amount of federal treasury debt held by the public divided by gross domestic product. [an',
39517:'alternative ratio would be the amount of total public debt federal, state, and local divided by gdp.] dedicated collections dedicated',
39518:'collections are specifically identified revenues, provided to the government by non federal sources, often supplemented by other financing sources, which',
39519:'remain available over time. these specifically identified revenues and other financing sources are required by statute to be used for',
39520:'designated activities, benefits or purposes, and must be accounted for separately from the governments general revenues. the three required criteria',
39521:'for funds from dedicated collections are: 1. astatute committingthefederalgovernmenttouse specificallyidentified revenues and or other financing sources that are originally provided',
39522:'to the federal government by a nonfederal source only for designated activities, benefits or purposes; 2. explicit authority for the',
39523:'fund to retain revenues and other financing sources not used in the current period for future use to finance the',
39524:'designated activities, benefits, or purposes; and 3. arequirementtoaccountfor and report on thereceipt, use,andretentionoftherevenues and other financing sources that distinguishes the',
39525:'fund from the governments general revenues. in some cases, specifically identified revenues or other financing sources are collected from a',
39526:'nonfederal source by one agency and transferred or appropriated to another. for example, social security taxes are collected from nonfederal',
39527:'entities employees and employers by the internalrevenueservice. thoseamountsaresubsequentlyappropriatedandtransferredtothe socialsecurityadministration. this internalprocess does notchangethenature oftherevenue or other financing source i.e., specifically',
39528:'identified revenues or other financing sources originally collected from a nonfederal source. page 24 appendix e fasab handbook, version 20',
39529:'06/21 appendix e default the failure to meet any obligation or term of a credit agreement, grant, or contract. often',
39530:'used to refer to accounts more than 90 days delinquent. treasury financial manual supplement deemed cost amount used as a',
39531:'surrogate for initial amounts that otherwise would be required to establish opening balances. deferred maintenance and repairs maintenance and repairs',
39532:'that were not performed when they should have been or were scheduled to be and which, therefore, are put off',
39533:'or delayed for a future period. demographicassumptions demographic assumptions address projected population trends for example, birth rates, mortality rates, and',
39534:'net immigration. deposit fund treasuryfinancialmanagementserviceestablishesdepositfundaccountstorecordmoniesthat donotbelongtothefederalgovernment. adescriptionofdepositfundcriteriamaybefoundin the treasury financial manual, section 1535, deposit fundaccounts. depreciationaccounting the systematic and rational',
39535:'allocation of the acquisition cost of an asset, less its estimated salvage or residual value, over its estimated useful life.',
39536:'page 25 appendix e fasab handbook, version 20 06/21 appendix e derivative classification is incorporating, paraphrasing, restating, or generating in',
39537:'new form information that is already classified, and marking the newly developed material consistent with the classification markings of the',
39538:'source of the information. derivative classification includes the classification of information based on classification guidance. the duplication or reproduction of',
39539:'existing classified information is not derivative classification. development systematic use of the knowledge and understanding gained from research for the',
39540:'production of useful materials, devices, systems, or methods, including the design and development of prototypes and processes. differential cost the',
39541:'cost difference expected if one course of action is adopted instead of others. direct cost the cost of resources directly',
39542:'consumed by an activity. direct costs are assigned to activities by direct tracing of units of resources consumed by individual',
39543:'activities. acost that is specifically identified with a single cost object. direct loan adisbursement of funds by the government to',
39544:'a nonfederal borrower under a contract that requires the repayment of such funds within a certain time with or without',
39545:'interest. the term includes the purchase of, or participation in, a loan made by another lender. adapted from omb circular',
39546:'a11 directed flows of resources expenses to nonfederal entities imposed by federal laws or regulations without providing federal financing. in',
39547:'the case of state and local governments, directed flows are known as “unfunded page 26 appendix e fasab handbook, version',
39548:'20 06/21 appendix e mandates.” the costs and financing of federal regulations do not flow through the government, but their',
39549:'effects are similar to direct federal expenditures and revenue. disclosure reporting information in notes or narrative regarded as an integral',
39550:'part of the basic financial statement. discount the difference between the estimated worth of a future benefit and its present',
39551:'value; a compensation for waiting or an allowance for returns from using the present value of these returns in other',
39552:'ways. discount rate an interest rate that is used in present value calculations to equate amountsthat will be received or',
39553:'paid in the future to their present value. discretionary spending in the federal budget process, discretionary spending refers to outlays',
39554:'from budget authority thatiscontrolledbyannualappropriationacts. annualappropriationactsarerequiredtofundthe continuingoperationofallfederalprogramsthatarenot mandatory. foradditionalinformation, see a glossary of terms used in the federal budget process, gao05734sp.',
39555:'dividend fund interest rate the interest rate determined at policy issuance used to determine the amount of the dividend fund.',
39556:'it is the rate used to credit interest to the dividend fund, and against which experience is measured to determine',
39557:'the amount of the interest portion of dividends paid to individual policyholders. aicpastatement of position 951, glossary, p. 33] page',
39558:'27 appendix e fasab handbook, version 20 06/21 appendix e donated capital the amount of nonreciprocal transfers of assets or',
39559:'services from state, local, and foreign governments; individuals; or others not considered parties related to the government. jfmip standardization project',
39560:'drawbacks refunds of all or part of duties on imported goods that are subsequently exported or destroyed. typically these arise',
39561:'when imported materials are used to manufacture a product that is later exported. in such cases, most of the duties',
39562:'originally paid are refundable when the finished product is exported. earmarked fund this term was used in sffas 27 and',
39563:'rescinded by sffas 43; see “dedicated collections.” econometric model an equation or a set of related equations used to analyze',
39564:'economic data through mathematical and statistical techniques. such models may be devised in order to depict the essential quantitative impactofalternativeassumptionsorgovernmentpolicies.',
39565:'dictionary of banking and finance, jerry m. rosenberg, ph.d., wiley & sons, newyork, 1982, hereafter cited as rosenberg’s dictionary. economicassumptions',
39566:'economic assumptions address the economic factors that are not under the direct legislative control of the federal government for example,',
39567:'inflation and growth in gdp. economic life the period during which a fixed asset is capable of yielding services of',
39568:'value to its owner. see “useful life”. page 28 appendix e fasab handbook, version 20 06/21 appendix e end user',
39569:'any component of a reporting entity that obtains goods for direct use in its normal operations. the component may also',
39570:'be a contractor. entitlement period the period such as, monthly for which benefits become due. entitlement program aprogram in which',
39571:'the federal government becomes automatically obligated to provide benefits to members of a specific group who meet the requirements established',
39572:'by law. entity aunit within the federal government, such as a department, agency, bureau, or program, for which a set',
39573:'of financial statements would be prepared. entity also encompasses a group of related or unrelated commercial functions, revolving funds, trust',
39574:'funds, and/or other accounts for which financial statements will be prepared in accordance with omb annual guidance on form and',
39575:'content of financial statements. entryage normalactuarial method amethod under which the actuarial present value of projected benefits of each employee',
39576:'is allocated on a level basis over the earnings or the service of the employee between entry age and assumed',
39577:'exit age. the portion of this actuarial present value allocated to a valuation year is called the normal cost. the',
39578:'portion of this present value not provided for at a valuation date by the present value of future normal cost',
39579:'is called the actuarial accrued liability. the assumption is made under this method that every employee entered the plan entry',
39580:'age at the time of initial employment or at the earliest eligibility date, if the plan had been in existence,',
39581:'and that contributions have been made from the entry age to the date of the actuarial valuation. the term “aggregate',
39582:'entry age normal” refers to an approach whereby costs are determined for the group as a whole rather than for',
39583:'each individual participant separately. page 29 appendix e fasab handbook, version 20 06/21 appendix e errors errors in financial statements',
39584:'result from mathematical mistakes, mistakes in the application of accounting principles, or oversight or misuse of facts that existed at',
39585:'the time the financial statements were prepared. sffas 21 estimated cost the process of projecting a future result in terms',
39586:'of cost, based on information available at the time. estimated costs, rather than actual costs, are sometimes the basis for',
39587:'credits to workinprocess accounts and debits to finished goods inventory. event ahappening of consequence to an entity. it may be',
39588:'an internal event that occurs within an entity, such as the transforming of raw materials into a product. or it',
39589:'may be an external event that involves interaction between an entity and its environment, such as a transaction with another',
39590:'entity, an act of nature, theft, vandalism, a tort caused by negligence, or an accident. adapted from financialaccounting standards board,',
39591:'statement of financialaccounting concepts no. 6, elements of financial statements exchange revenue inflows of resources to a governmental entity that',
39592:'the entity has earned. they arise from exchange transactions, which occur when each party to the transaction sacrifices value and',
39593:'receives value in return. exchange transaction atransaction that arises when each party to the transaction sacrifices value and receives value',
39594:'in return. page 30 appendix e fasab handbook, version 20 06/21 appendix e exchange transaction insurance programs other than life',
39595:'insurance cover the risk of loss from adverse events, other than death of individuals, involved in exchange transactions as defined',
39596:'in sffas 7. executory contract acontract whichhasnot beenperformed byall partiesto it. trascona, joseph l., business law, william c. brown c.',
39597:'publishers, 1981 executory cost those costs such as insurance, maintenance, and taxes incurred for leased property, whether paid by the',
39598:'lessor or lessee. financialaccounting standards board, statement of financial accounting standards no. 13, accounting for leases expected value astatistical measurement',
39599:'attribute that is the sum of the products of each potential outcome multiplied by the probability of that potential outcome.',
39600:'expendedappropriations the dollar amount of appropriations used to fund goods and services received or benefits or grants provided. expenditure with',
39601:'respect to provisions of theantideficiencyact 31 u.s.c. 15131514 and the congressional budget and impoundment controlact of 1974 2 u.s.c. 622i,',
39602:'a term that has the same definition as outlay. gao budget glossary expense outflows or other using up of assets',
39603:'or incurrences of liabilities or a combination of both during a period from providing goods, rendering services, or carrying out',
39604:'other activities related to an page 31 appendix e fasab handbook, version 20 06/21 appendix e entity’s programs and missions,',
39605:'the benefits from which do not extend beyond the present operating period. expiredappropriations accounts appropriation accounts in which the balances',
39606:'are no longer available for incurring new obligations because the time available for incurring such obligations has expired. jfmip standardization',
39607:'project fair value fair value is the amount at which an asset or liability couldbe exchanged ina current transaction between',
39608:'willing parties, other than in a forced or liquidation sale. federally funded research and development center federally funded research and',
39609:'development center ffrdc is a governmentfunded entity that hasa longtermcontractualrelationshipwith oneormorefederal agencies.4ffrdcscan be privately owned or governmentowned, and they serve',
39610:'to meet the longterm research and development needsoffederalagenciesthatcouldnot otherwisebemetaseffectivelyinhouseor through existing contractors. 49 fed. reg. at 14,464; 48 c.f.r. §',
39611:'35.017a. ffrdcs are established either specifically in statute or under the statutory authority of agencies to enter into contracts, which',
39612:'can be inherent or specific authority, and are used to perform research and development and related tasks. fiduciary noun afederal',
39613:'entitythatholds assets intrustfor nonfederalparties inwhichthenon federal parties have an ownership interest that the federal government must uphold. adjective relating to',
39614:'the process of the collection or receipt, and the management, protection, accounting, investment and disposition by the federal government of',
39615:'cash or other assets in which nonfederal individuals or entities have an ownership interest that the federal government must uphold.',
39616:'4 the office of federal procurement policy ofpp and federalacquisition regulation far policies for ffrdcs apply to executive agencies, which',
39617:'includes “an executive department, a military department, or any independent establishment within the meaning of 5 u.s.c. 101, 102, and',
39618:'1041, respectively, and any wholly owned government corporation within the meaning of 31 u.s.c. § 9101.” 48 c.f.r. § 2.101;',
39619:'see also 5 u.s.c. § 403. page 32 appendix e fasab handbook, version 20 06/21 appendix e fiduciaryactivity an activity',
39620:'that relates to the collection or receipt, management, protection, accounting, investment and disposition by the federal government of cash or',
39621:'other assets in which non federal individuals or entities have an ownership interest that the federal government must uphold. fiduciaryasset',
39622:'fiduciaryassetsareassetsinwhichnonfederalpartieshaveanownershipinterestandareheld by a federal entity under provision of law, regulation or other fiduciary arrangement. fiduciary collections fiduciary collections are an',
39623:'inflow to a federal entity of cash or other assets in which non federal parties have an ownership interest that',
39624:'the federal government must uphold. fiduciary fund balance with treasury cash that is held in the u.s. treasury and administered',
39625:'by a federal entity on behalf of fiduciary beneficiaries. fiduciary relationship afiduciary relationship exists when an authorized agent or entity',
39626:'of the government accepts, recognizes, agrees to or consents to undertake fiduciary activity. financingaccount anonbudget account associated witheach credit programaccount.',
39627:'the financing accountholds fund balances, receives the subsidy cost payment fromthe credit program account, and includes all other cash flows',
39628:'to and from the government resulting from post1991 direct loans or loan guarantees. omb circular a11, and omb circular a34,',
39629:'instructions on budget execution, creditapportionment and budget execution, hereafter cited as omb circular a34. page 33 appendix e fasab handbook,',
39630:'version 20 06/21 appendix e firstin, firstout fifo acost flowassumption; the first goodspurchased or produced are assumed to be the',
39631:'first goods sold. fiscal gap the fiscal gap is the change in noninterest spending and/or receipts that would be necessary',
39632:'to maintain public debt at or below a target percentage of gdp. the fiscal gap is the net present value',
39633:'of projected noninterest spending5 minus projected receipts, adjusted by the decrease or increase in public debt required to maintain public',
39634:'debt at the target level for the stated projection period. the fiscal gap may be expressed as: a a summary',
39635:'amount in present value dollars, b a share of the present value of the gdp6 for the projection period, and/or',
39636:'c a share of the present value of projected receipts or projected noninterest spending. fiscal sustainability reporting in federal financial',
39637:'reporting, fiscal sustainability reporting is the short term for the basic financial statement, disclosures and required supplementary information required in',
39638:'the financial report of the u.s. government. fixed cost acost that does not vary in the short term with the',
39639:'volume of activity. fixed cost information is useful for cost savings by adjusting existing capacity, or by eliminating idle facilities.',
39640:'also called nonvariable cost or constant cost. 5since interest is factored into the present value calculation, the fiscal gap as',
39641:'a share of spending is expressed as a share of spending excluding interest. 6gdp isthetotalmarketvalueofgoodsandservicesproduceddomesticallyduringagivenperiod. thecomponentsof gdp are consumption both',
39642:'household and government, gross investment both private and government, and net exports. page 34 appendix e fasab handbook, version 20',
39643:'06/21 appendix e fixed value securities securities that have a known maturity or redemption value at the time of issue.',
39644:'forecast the term “forecast” in this document refers to prospective financial information, including but not limited to prospective financial statements,',
39645:'based on management’s assumptions about future conditions and actions that are deemed probable during the period covered. forecasts are distinguished',
39646:'from “projections,” which provide prospective financial information based on one or more hypothetical assumptions or sets of assumptions. the hypothetical',
39647:'assumptions used in projections relate to future conditions and actions that may occur, but which are not necessarily deemed probable',
39648:'to occur. both forecasts and projections may contain a range. foreclosure amethod of enforcing payment of a debt secured by',
39649:'a mortgage by seizing the mortgaged property. foreclosureterminatesallrightsthat themortgagorhasinthemortgagedpropertyupon completion of due process through the courts. treasury financial manual supplement',
39650:'forfeited property forfeited property is property for which title has passed to the government. forfeited property includes 1 monetary instruments,',
39651:'intangible property, real property, and tangible personal property acquired through forfeiture proceedings; 2 property acquired by the government to satisfy',
39652:'a tax liability; and 3 unclaimed and abandoned merchandise. friableacm refers to material containing more than 1 percent asbestos as',
39653:'determined using the method specified in appendix e, subpart e, 40 cfr part 763, section 1, polarized light microscopy, that,',
39654:'when dry, can be crumbled, pulverized, or reduced to powder by hand pressure. if the asbestos content islessthan 10 percent',
39655:'asdeterminedbyamethodother than point counting bypolarized lightmicroscopyplm,theasbestoscontentisverifiedbypointcountingusingplm. 40cfr§ 61.141 page 35 appendix e fasab handbook, version 20 06/21 appendix e fullabsorption',
39656:'costing amethodofcostingthatassignsabsorbs alllabor, material,and service/manufacturingfacilities andsupport coststoproductsorother costobjects. thecostsassignedinclude those that do and do not vary with the level of',
39657:'activity performed. full cost the total amount of resources used to produce the output. more specifically, the full cost of',
39658:'an output produced by a responsibility segment is the sum of 1 the costs of resources consumed by the responsibility',
39659:'segment that directly or indirectly contribute to the output, and 2 the costs of identifiable supporting services provided by other',
39660:'responsibility segments within the reporting entity and by other reporting entities. sffas no. 4, managerial cost accounting concepts and standards',
39661:'for the federal government, para. 89all direct and indirect costs to any part of the federal government of providing goods,',
39662:'resources, or services. omb circular a25. fulfillment cost fulfillment cost includes all coststhat an entity will incur in fulfilling the',
39663:'promisesthat constitute a liability. fund fund has more than one meaning. depending on the context it may mean merely a',
39664:'resource as in funds available to pay an obligation. or, for budgetary accounting, it may mean federal funds or trust',
39665:'funds, the two major groups of funds in the budget.7 the federal funds include all transactions not classified by law',
39666:'as being in trust funds. the main financing component of the federal funds group is referred to as the general',
39667:'fund, which is used to carry out the general purposesof government ratherthan being restrictedbylawtoa specificprogramand consistsof all collections not earmarked',
39668:'by law to finance other funds. afund can also mean a fiscal and accounting entity with a selfbalancing set of',
39669:'accounts recording cash and other assets, together with all related liabilities and residual equities or 7an explanation of the two',
39670:'major categories of federal funds and trust funds may be found in chapter 22, trust funds and federal funds, ofanalytical',
39671:'perspectives, budget of the u.s. government, fiscal year 2006. page 36 appendix e fasab handbook, version 20 06/21 appendix e',
39672:'balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in',
39673:'accordance with special regulations, restrictions, or limitations. the term fund is used in multiple contexts in this standard. for example,',
39674:'the introductory and background material discusses funds in the context of budget accounting. on the other hand, when the standard',
39675:'refersto a fiduciaryfund in the illustrationsthat follow this glossary, it isin the context a selfbalancing set of accounts. fully insured',
39676:'fully insured status means that a social insurance participant is eligible for benefits. social insurance benefits include pensions and health',
39677:'care for retirees and the disabled. for example, social security and medicare participants become permanently fully insured when they attain',
39678:'at least 40 quarters of work in covered employment qc. social security and medicare participants may be fully insured without',
39679:'being permanently fully insured. this is important with respect to disability benefits, which include subsistence payments and medical care. disability',
39680:'benefits maybe neededwellbeforethe participantsattainedretirement age. aparticipantwho receives disability benefits for 24 consecutive months is eligible for medicare and, if he',
39681:'or she continues receiving disability benefits until attaining retirement age, he or she is converted to socialsecurityretirementbenefits. tobefullyinsured,participantsgenerallyneedaminimumof 6 qc.',
39682:'once a worker has accumulated 40 qcs, he or she remains permanently fully insured, that is, no further qcs are',
39683:'required. fund balance with treasury afederal entitys fund balance with the treasury is the aggregate amount of funds in the',
39684:'entitys accountswithtreasuryforwhichtheentityisauthorizedtomakeexpendituresandpayliabilities. fund balance with treasury is an intragovernmental item. from the component entitys perspective, a fund balance with treasury',
39685:'is an asset because it represents the entitys claim to the federal government’sresources. however, from the perspective of the federal',
39686:'government as a whole, it is not an asset; and while it represents a commitment to make resources available to',
39687:'federaldepartments, agencies, programs and other entities, it isnot a liability.an entitysfund balance with treasury is increased by, among other things,',
39688:'amounts collected and credited to a fundthattheentityisauthorizedtospendorusetooffsetitsexpenditures. disbursementsmade to pay liabilities or to purchase assets, goods, and services, investments in',
39689:'treasury or other securities, transfers and reimbursements to other entities or to the treasury, and similar transactions reduce an entitys',
39690:'fund balance with treasury. page 37 appendix e fasab handbook, version 20 06/21 appendix e garnishments garnishmentsare amethod of debt',
39691:'collectionin which aportion of apersonssalaryortaxrefund is paid to a third party in compliance with a statute or court order. nonfederal',
39692:'parties see nonfederal individuals and entities. general fund accounts for receipts not earmarked by law for a specific purposes, the',
39693:'proceeds of general borrowing, and the expenditure of these moneys. omb, the budget system and concepts general pp&e land land',
39694:'and permanent land rights acquired for or in connection with other general pp&e are considered generalpp&e but are not to',
39695:'be capitalizedon the balance sheet. generalpp&e land shall exclude 1 withdrawn public lands or 2 land restricted for conservation, preservation,',
39696:'historical, or other like restrictions. general purpose federal financial reports general purpose federal financial reports gpffrs is a generic term',
39697:'to refer to the report that contains the reporting entity’s financial statements that are prepared pursuant to generally accepted accounting',
39698:'principles. in the federal government, the report for the u.s. government wide reporting entityis known asthe consolidated financial report of',
39699:'the u.s. government cfr and for component reporting entities it is usually included in the performance and accountability report, the',
39700:'agency financial report, or the annual management report. general purpose financial reports reports intended to meet the common needs of',
39701:'diverse users who typically do not have the ability to specify the basis, form, and content of the reports they',
39702:'receive. page 38 appendix e fasab handbook, version 20 06/21 appendix e good atangible product produced to provide to a',
39703:'customer. governmentacknowledged events events that are not a liability in themselves, but are those events that are “of financial consequence”',
39704:'to the federal government because it chooses to respond to the event. governmental receipts collections from the public that result',
39705:'primarily from the exercise of the governments sovereign or governmental powers. governmental receipts consist mostly of individual and corporation incometaxesandsocialinsurancetaxesbutalso',
39706:'includeexcise taxes,compulsoryusercharges, customs duties, court fines, certain license fees, giftsand donations, and deposits of earnings by the federal reserve system.',
39707:'they are compared to outlays in calculating a surplus or deficit. omb, the budget system and concepts governmentrelated events nontransactionbased',
39708:'events that involve interaction between federal entities and their environment. government sponsored enterprise government sponsored enterprise gse is created by',
39709:'congress with its particular attributes defined in its enabling legislation and charter. despite thisdiversity, there are at least four readily',
39710:'observable characteristics of gses: 1 private sector ownership, 2 limited competition, 3 activities limited by congressional charter, and 4 chartered',
39711:'privileges that create an inferred federal guarantee of obligations.8 8 congressional research service report for congress governmentsponsored enterprises gses: an',
39712:'institutional overview page 39 appendix e fasab handbook, version 20 06/21 appendix e grants 31 usc sec. 6304 defines grants',
39713:'as follows: an executive agency shall use a grant agreement as the legal instrument reflecting a relationship between the united',
39714:'states government and a state, a local government, or other recipient when 1 the principal purpose of the relationship is',
39715:'to transfera thing of value to the state or local government or other recipient to carryout a public purpose of',
39716:'support or stimulation authorized by a law of the united states instead of acquiring by purchase, lease, or barter property',
39717:'or services for the direct benefit or use of the united states government; and 2 substantial involvement is not expected',
39718:'between the executive agency and the state, local government, or other recipient when carrying out the activity contemplated in the',
39719:'agreement. gross domestic product anations gross domestic product is one of the ways for measuring the size of its economy.',
39720:'the gdp of a nation is defined as the total market value of all final goods and services produced domestically',
39721:'during a given period of time. the components of gdp are: gdp = private sector consumption and investment + government',
39722:'consumption and investment + net exports exports imports. group depreciation methodology the group methodology is a method of calculating depreciation',
39723:'that applies a single, average rate to a number of homogeneous assets having similar characteristics and service lives. hazardous waste',
39724:'asolid, liquid, or gaseous waste, or combination of these wastes, which because of its quantity, concentration, or physical, chemical, or',
39725:'infectious characteristics may cause or significantly contribute to an increase in mortality or an increase in serious irreversible, or incapacitating',
39726:'reversible, illness or pose a substantial present or potential hazard to human health or the environment when improperly treated, stored,',
39727:'transported, disposed of, or otherwise managed. page 40 appendix e fasab handbook, version 20 06/21 appendix e held for remanufacture',
39728:'items in the process of or awaiting inspection, disassembly, evaluation, cleaning, rebuilding, refurbishing and/or restoration to serviceable or technologically updated/upgraded',
39729:'condition. items held for remanufacture may consist of direct materials, including repairable parts and subassemblies, also referred to as carcasses',
39730:'at the department of defense and workinprocess including labor costs. heritageassets property, plant, andequipment thatareunique foroneormoreofthe following reasons:historical or natural',
39731:'significance; cultural, educational or artistic e.g., aesthetic importance; or, significant architectural characteristics. historical cost initially, theamount of cashoritsequivalentpaidtoacquireanasset; subsequenttoacquisition, the',
39732:'historical amount may be adjusted for amortization. human capital expenses incurred for education and training programs financed by the federal',
39733:'government for the benefit of the public and designed to increase or maintain national economic productive capacity. impacts in the',
39734:'context of discussing performance measurement, sffac 1 defines “impacts” as the difference between what actually occurred and what would have',
39735:'occurred in the absence of a government program. sffac 1, paragraph 206 notes that, to the extent feasible and practical,',
39736:'effectiveness evaluation should focus on program results or effects in the sense of “impacts.” assessingimpactsof governmentalactioninthissensetypicallyrequiresprogramevaluationsorother techniques that transcend annual',
39737:'performance reporting, though these techniques often will avail of information in the annual performance reports. these evaluations often require several',
39738:'years of data, are expensive to conduct, and typically are not performed on an annual basis for a given program.',
39739:'page 41 appendix e fasab handbook, version 20 06/21 appendix e impairments asignificant9 and permanent decline in the service utility',
39740:'of gpp&e or expected service utility for construction work in progress. imputed financing financing provided to the reporting entity by',
39741:'another government entity covering certain costs incurred by the former. for example, part of federal employee retirement benefits have been',
39742:'paidbythegovernment’s centralpersonnel office. areportingentitywouldrecognizethefull accruing cost of the benefits as well as the imputed financing so provided. [see sffas 7,',
39743:'accounting for revenue and other financing sources and concepts for reconciling budgetary and financialaccounting, paragraph 73.] imputed interdepartmental costs the',
39744:'unreimbursed i.e. nonreimbursed and underreimbursed portion of the full costs of goods andservicesreceived bythe entityfrom aproviding entitythat isnot part of',
39745:'the same department or larger reporting entity other than the u.s. government as a whole. interpretation 6 imputed intradepartmental costs',
39746:'the unreimbursed portion of the full costs of goods and services received by the entity from a providing entity that',
39747:'is part of the same department or larger reporting entity i.e. other bureaus, components or responsibility segments within the department',
39748:'or larger reporting entity. interpretation 6 income rate the ratio of contributions and tax income to taxable payroll for the',
39749:'year. 9the determination of whether or not an item is significant is a matter of professional judgment. determining if a',
39750:'decline in service utility is significant is separate and distinct from materiality considerations that include considering the likely influence that',
39751:'such disclosure could have on judgments or decisions of financial statement users. page 42 appendix e fasab handbook, version 20',
39752:'06/21 appendix e incremental cost the increase or decrease in total costs that would result from a decision to increase',
39753:'or decrease output level, to add a service or task, or to change any portion of operations. this information helps',
39754:'in making decisions such as to contract work out, undertake a project, or increase, decrease, modify, or eliminate an activity',
39755:'or product. incurred but not reported ibnr refersto estimated claimsfromadverse eventsthat have occurred as of the end of the reporting',
39756:'period, but have not yet been reported to the insurance program for settlement. indirect cost acost that cannot be identified',
39757:'specifically with or traced to a given cost object in an economically feasible way. inforce refers to arrangements that are',
39758:'unexpired as of a given date. initial direct lease cost initial direct lease costs are costs that are directly attributable',
39759:'to negotiating and arranging a lease or portfolio of leases and would not have been incurred without entering into the',
39760:'lease. insurancearrangement arrangement is a general term used for a contract or other agreement between an insurance program and specific',
39761:'parties, such as but not limited to individuals, state, local, or foreign governments, other federal agencies, or businesses. an arrangement',
39762:'may include and/or identify: the term the insurance arrangement is inforce, the insurance program’s responsibilities, the risk assumed by the',
39763:'insurance program, such as: all risk for covered losses, partial risk by filling a gap where commercial insurance companies are',
39764:'not able or willing to provide the insurance, a timing risk wherein the insurance program provides compensation for losses in',
39765:'anticipation that future page 43 appendix e fasab handbook, version 20 06/21 appendix e funding sourceswillbe sufficienttocoverallorpart of pastbenefitspaidorriskssharedbya third',
39766:'party; the adverse event, the insured party or parties and their premium requirements, the beneficiary or beneficiaries and their responsibilities',
39767:'for filing claims, and/or the financial compensation. insurance claim is a formal request for payment for losses as authorized under',
39768:'the insurance arrangement. insurance portfolios is a grouping of insurance programs or arrangements that have some meaningful relationship based on',
39769:'arrangement period/duration, shared risks, management, customers, geographic regions, or other factors. insurance program is a general term used to refer',
39770:'to a program that is authorized by law to financiallycompensate a designated population of beneficiaries by accepting all or part',
39771:'of the risk for losses incurred as a result of an adverse event. internal controls insuranceand guarantee programs federal government',
39772:'programs that provide protection to individuals or entities against specified risks. because the federal government frequently commingles aspects of insurance',
39773:'and guarantees within the same program, this statement sffas 5 treats the terms as a single type of activity. also',
39774:'see separate definition of social insurance. interentity aterm meaning between or among different federal reporting entities. it commonly refers to',
39775:'activities or costs between two or more agencies, departments, or bureaus. page 44 appendix e fasab handbook, version 20 06/21',
39776:'appendix e interest the service charge for the use of money or capital, paid at agreed intervals by the user,',
39777:'commonly expressed as an annual percentage of outstanding principal. interest method 1 under the interest method of amortization, an amount',
39778:'of interest equalto the carrying amount of the investment times the effective interest rate is calculated for each accounting period.',
39779:'this calculated interest is the effective interest of the investment referred to as “effective yield” in some literature. the effective',
39780:'interest is compared with the stated interest of the investment. the stated interest is the interest that is payable to',
39781:'the investor according to the stated interest rate.the difference between the effectiveinterest andthe stated interest istheamount bywhich the discount or',
39782:'the premium should be amortized i.e., reduced for the accounting period. 2a method used to amortize the premium or discount',
39783:'of an investment in bonds, or, as used in sffas 2, to amortize the subsidy cost allowance of direct loans.',
39784:'under this method, the amortization amount of the subsidy cost allowance equals the effective interest minus the nominal interest of',
39785:'the direct loans times the effective interest rate the discount rate. the nominal interest equals the nominal amount face amount',
39786:'of the direct loans times the stated interest rate the rate stated in the loan agreements. [special term from sffas',
39787:'2] interest rate the price charged per unit of money borrowed per year, or other unit of time, usually expressed',
39788:'as a percentage. intergenerational equity intergenerational equity refers to the extent that different age groups are required to assume the',
39789:'financial burdens for services provided to other age groups. internal control “internal control” is a process, effected by an agency’s',
39790:'management and other personnel, designed to provide reasonable assurance that the objectives of the agency are being achieved in the',
39791:'following categories: page 45 appendix e fasab handbook, version 20 06/21 appendix e effectiveness and efficiency of operations including the',
39792:'use of the entity’s resources. reliability of financial reporting, including reports on budget execution, financial statements, and other reports for',
39793:'internal and external use. compliance with applicable laws and regulations. internal controls consist of the control environment, risk assessment, control',
39794:'activities, information and communication, and monitoring. anecessary implication or subset of these objectives is the safeguarding of agency assets against',
39795:'unauthorized acquisition, use, or disposition. consequently, the definition of internal control, as it relates to safeguarding assets can be extended',
39796:'to include processes, effected by an agency’s management and other personnel, designed to provide reasonable assurance regarding prevention of or',
39797:'prompt detection of unauthorized acquisition, use, or disposition of the agency’s assets.” from standards for internal control in the federal',
39798:'government, exposure draft, u.s. gao, december 1997. intragovernmental fund revolving funds that conduct businesstype operations primarily within and between government',
39799:'agencies. intragovernmental lease an intragovernmental lease is a contract or agreement occurring within a consolidation entity or between two or',
39800:'more consolidation entities as defined in sffas 47, reporting entity1 whereby one entity lessor conveys the right to control the',
39801:'use of pp&e the underlying asset to another entity lessee for a period of time as specified in the contract',
39802:'or agreement in exchange for consideration. [this definition will become effective when sffas 54, leases, becomes effective for reporting periods',
39803:'beginning after september 30, 2020. early adoption is not permitted.] inventory inventoryis tangible personalpropertythat is1held for sale, 2 intheprocessof production',
39804:'for sale, or 3 to be consumed in the production of goods for sale or in the provision of services',
39805:'for a fee. 1sffas 47, reporting entity, outlinesthe characteristics asawhole that anorganization wouldhaveto beconsidered a consolidated entity sffas 47 par.',
39806:'38–42. page 46 appendix e fasab handbook, version 20 06/21 appendix e job order costing amethod of cost accounting that',
39807:'accumulates costs for individual jobs or lots. ajob may be a service or manufactured item, such as the repair of',
39808:'equipment or the treatment of a patient in a hospital. land land is the solid part of the surface of',
39809:'the earth. excluded from the definition of land are the natural resources that is, depletable resources such as mineral deposits',
39810:'and petroleum; renewable resources such as timber, and the outercontinental shelf resources related to land. landacquired for or in connection',
39811:'with other general pp&e land acquired with the intent to construct general pp&e and land acquired in combination with general',
39812:'pp&e, including not only land used as the foundation, but also adjacent land considered to be the general pp&es common',
39813:'grounds. land held for disposalacres of or exchange land for which the entity has satisfied the statutory disposal authority requirements',
39814:'specific to the land in question. disposal includes conveyances of federal land to nonfederal entities not limited to sale, transfer,',
39815:'exchange, lease, publicprivate partnership, and donation or any combination thereof. lastin, firstout lifo acost flow assumption; the last goods purchased',
39816:'are assumed to be the first goods sold. land rights interests and privileges held by the entity in land owned',
39817:'by others, such as leaseholds, easements, water and water power rights, diversion rights, submersion rights, rightsofway, mineral rights, and other',
39818:'like interests in land. land rights such as easements or rightsofway that are for an unspecified period of time or',
39819:'unlimited duration are considered permanent land page 47 appendix e fasab handbook, version 20 06/21 appendix e rights. temporaryland rights',
39820:'are those land rightsthat are for a specified period of time or limited duration. latestacquisition cost lac method amethod that',
39821:'provides that all like units that are held be valued at the invoice price of the most recent like item',
39822:'purchased, less any discounts, plus any additional costs incurred to bring the item to a form and location suitable for',
39823:'its intended use. latestacquisition cost includes all amounts, except interest, paid to a vendor to acquire an item. lease a',
39824:'lease is a contract or agreement whereby one entity lessor conveys the right to control the use of property, plant,',
39825:'and equipment pp&e the underlying assetto anotherentitylesseefor a period of time as specified in the contract or agreement in exchange',
39826:'for consideration. [this definition will become effective when sffas 54, leases, becomes effective for reporting periods beginning after september 30,',
39827:'2020. early adoption is not permitted.] lease concessions lease concessions are rent discounts made by the lessor to entice the',
39828:'lessee to sign a lease. lease concessionsinclude rent holidays/free rent periods, reduced rents, or commission credits. [this definition will become',
39829:'effective when sffas 54, leases, becomes effective for reporting periods beginning after september 30, 2020. early adoption is not permitted.]',
39830:'lease incentives lease incentivesinclude lessorpaymentsmade to or on behalf of the lessee to entice the lessee to sign alease. lease',
39831:'incentivesmay include upfront cash paymentsto the lessee; for example, moving costs, termination fees to lessee’s prior lessor, or lessor’s assumption',
39832:'of the lessee’s lease obligation under a different lease with another lessor. [this definition will become effective when sffas 54,',
39833:'leases, becomes effective for reporting periods beginning after september 30, 2020. early adoption is not permitted.] page 48 appendix e',
39834:'fasab handbook, version 20 06/21 appendix e leasehold improvements leasehold improvements are additions, alterations, remodeling, renovations or other changes to',
39835:'a leased property that either extend the useful life of the existing property or enlarge or improve its capacity and',
39836:'are paid for financed by the lessee. [this definition will become effective when sffas 54, leases, becomes effective for reporting',
39837:'periods beginning after september 30, 2020. early adoption is not permitted.] legacy entity an entity from which a smaller entity',
39838:'or specific function is being transferred. technical bulletin 20031 lessee’s estimated incremental borrowing rate the lessee’s estimated incremental borrowing rate',
39839:'is the estimated rate that would be charged forborrowingthelease paymentamountsforthe leaseterm. [this definition will become effective when sffas 54, leases,',
39840:'becomes effective for reporting periods beginning after september 30, 2020. early adoption is not permitted.] lessor improvements lessor improvements are',
39841:'additions, alterations, remodeling, renovations or other changes to a leased property that either extend the useful life of the existing',
39842:'property or enlarge or improve its capacity and are paid for financed by the lessor rather than by the lessee.',
39843:'[this definition will become effective when sffas 54, leases, becomes effective for reporting periods beginning after september 30, 2020. early',
39844:'adoption is not permitted.] level of utilization the portion of the usable capacity currently being used. page 49 appendix e',
39845:'fasab handbook, version 20 06/21 appendix e liability for federal accounting purposes, a probable future outflow or other sacrifice of',
39846:'resources as a result of past transactions or events. liability for losses on remaining coverage is an accrued obligation to',
39847:'beneficiaries attributable to coverage of insured events anticipated to occur after the end of the reporting period through the open',
39848:'arrangement period. lifecycle costing an acquisition or procurement technique which considers operating, maintenance, and other costs in addition to the',
39849:'acquisition cost of assets. life insurance programs cover the risk of loss from death of individuals involved in exchange transactions',
39850:'as defined in sffas 7. liquidatingaccount the budget account that includes all cash flows to and from the government resulting',
39851:'from pre1992 direct loans or loan guarantees those originally obligated or committed before oct. 1, 1991, except those pre1992 direct',
39852:'loans and loan guarantees that have been directly modified and transferred to a financing account. see omb circular a11 loan',
39853:'guarantee any guarantee, insurance, or other pledge with respect to the payment of all or part of the principal or',
39854:'interest on any debt obligation of a nonfederal borrower to a nonfederal lender but does not include the insurance of',
39855:'deposits, shares, or other withdrawable accounts in financial institutions. omb circular a11 page 50 appendix e fasab handbook, version 20',
39856:'06/21 appendix e loan guarantee commitment abinding agreement by a federal agency to make a loan guarantee when specified conditions',
39857:'are fulfilled by the borrower, the lender, or any other party to the guarantee agreement. omb circular a11 loss any',
39858:'expense or irrecoverable cost, often referred to as a form of nonrecurring charge, an expenditure from which no present or',
39859:'future benefit may be expected. longtermassumptions assumptions are considered longterm if the underlying event about which the assumption is made',
39860:'will not occur for five years or more. if the event is one of a series of events the entire',
39861:'series should be considered the event and, thus, the payment may commence within one year but would be required to',
39862:'extend at least five years. otherwise, the asset or liability would be classified as shortterm. lower of cost or market',
39863:'avaluationrulethat recognizesimpairmentofasset valuesbut avoidsanticipatedgains. the rule is typically applied to individual items or groups of like items, such as inventory',
39864:'or marketable securities. in this rule, “cost” refers to historical cost and “market” refers to the current replacement cost by',
39865:'purchase or production. maintenance the act of keeping fixed assets in usable condition. it includes preventive maintenance, normal repairs, replacement',
39866:'of parts and structural components, and other activitiesneeded to preserve the asset so that it continues to provide acceptable services',
39867:'and achieves its expected life. maintenance excludes activities aimed at expanding the capacity of an asset or otherwise upgrading it',
39868:'to serve needs different from, or significantly greater than, those originally intended. page 51 appendix e fasab handbook, version 20',
39869:'06/21 appendix e managerial costaccounting system the organization and procedures, whether automated or not, and whether part of the general',
39870:'ledger or standalone, that accumulates and reports consistent and reliable cost information and performance data from various agency feeder systems.',
39871:'the accumulated and reported data enable management and other interested parties to measure and make decisions about the agency’s/segment’s ability',
39872:'to improve operations, safeguard assets, control its resources, and determine if mission objectives are being met. mandatory spending mandatory spending',
39873:'includes entitlement authority for example, social security and medicare and payment of interest on the national debt. congress controls mandatory',
39874:'spending by controlling eligibility and setting benefit and payment rules, rather than by annual appropriation acts. for additional information, see',
39875:'a glossary of terms used in the federal budget process, gao05734sp. marketable treasury securities debt securities, including treasury bills, notes,',
39876:'and bonds, that the u.s. treasury offers to the public and are traded in the marketplace. their bid and ask',
39877:'prices are quoted on securities exchange markets. marketbased treasury securities treasury securities issued to governmental accounts that are not traded',
39878:'on any securities exchange but mirror the prices of marketable securities with similar terms. see treasury financial manual 24100, federalagencies’',
39879:'financial reports, exhibit no. 3. market value 1 the estimated amount that can be realized by disposing of an item',
39880:'through arm’s length transactions in the marketplace; the price usually representative at which bona fide sales have been consummated for',
39881:'products of like kind, quality, and quantity in a particular market at any moment of time. 2 for investmentsin marketable',
39882:'securities, the term refersto the valueof such page 52 appendix e fasab handbook, version 20 06/21 appendix e securities determined',
39883:'bypricesquoted on securitiesexchange markets multiplied by the number of bonds or shares held in an investment portfolio. measurable can be',
39884:'determined with reasonable certainty or is reasonably estimable. measurementapproach the measurement approach is how an asset or liability is measured',
39885:'in periods after initial recordingi.e., at the historical cost orinitial transactionamount with subsequent adjustmentsfor amortization, depreciation, or depletion, if applicable',
39886:'or at an amount, such as fair value, measured at each financial statement date. measurementattribute the measurement attribute or measurement',
39887:'basis is a measurable characteristicof an asset or liability, such as its fair value or settlement amount. medicare anational, federally',
39888:'administered health insurance program authorized in 1965 to cover the cost of hospitalization, medical care, and some related services for',
39889:'most people over age 65, people receivingsocialsecuritydisabilityinsurancepaymentsfortwoyears,andpeoplewithendstage renal disease. medicare consists of two separate but coordinated programs: parta, hospital insurance',
39890:'hi and part b, supplementarymedicalinsurancesmi.allpersonsentitled tohi are eligible to enroll in the smi program on a voluntary basis by paying',
39891:'a monthly premium. health insurance protection is available to medicare beneficiaries without regard to income. military missions functions performed by',
39892:'the department of defense or its component entities to prepare for the effective pursuit of war and military operations short',
39893:'of war; to conduct combat, peacekeeping, and humanitarian military operations; and to support civilian authorities during civil emergencies. page 53',
39894:'appendix e fasab handbook, version 20 06/21 appendix e model arepresentation in mathematical symbols or at least graphically that depicts',
39895:'a formulated theory about the relationship among measurements of some phenomenon that varies. amodel includes both cash flow assumptions and',
39896:'model assumptions. modeling the process of developing and selecting an appropriate set of cash flows and model which generally have',
39897:'two aspects: 1 a choice of a general mathematical function equation describing a basic shape or process and 2 a',
39898:'choice of the model parameters that distinguish one specific shape from the general class of functional forms. the mathematical functions',
39899:'may take many forms. commonly known examples of models are simple regression y=ax+b, multiple regression y=ax+by+z, and time series. many',
39900:'other simple or more complex model forms related to cash flow modeling reform are possible. model parameters the values that',
39901:'identify a unique model from the general form. for example, y=2x+3 has parameters a=2 and b=3 for the simple regression',
39902:'model class. note that “model parameter” is sometimesused in credit reformdocumentsin lieu of the moreappropriate term “input variable in the',
39903:'spreadsheet.” modification afederal government action, including new legislation or administrative action, that directly or indirectly alters the estimated subsidy cost',
39904:'and the present value of outstanding direct loans or direct loan obligations, or the liability of loan guarantees or loan',
39905:'guarantee commitments. direct modifications are actions that change the subsidy cost by altering the terms of existing contracts or by',
39906:'selling loan assets. indirect modifications are actions that change the subsidy cost by legislation that alters the way in which',
39907:'an outstanding portfolio of direct loans or loan guaranteesisadministered. the termmodificationdoesnotincludesubsidycostreestimates,the routine administrative workouts of troubled loans, and actions that',
39908:'are permitted within the existing contract terms. page 54 appendix e fasab handbook, version 20 06/21 appendix e modificationadjustment transfer',
39909:'anonexpenditure transfer from a financing account to the treasury, or vice versa, to offset the difference between thecostofmodification of direct',
39910:'loansorloanguaranteesand thechangein the book value of direct loans or loan guarantee liabilities. see also omb circular a11 movingaverage an inventory',
39911:'costing method used in conjunction with a perpetual inventory system. aweighted average cost per unit is recomputed after every purchase.',
39912:'goods sold are costed at the most recent moving average cost. multiuse heritageassets heritage assets whose predominant use is general',
39913:'government operations. negative subsidyaccount thebudgetaccountforthereceipt and/orexpenditureof amountspaidfromthefinancing account when there is a negative subsidy for the original estimate or a',
39914:'downward reestimate not necessarily used for mandatory programs. net cost of operations totalcostsincurredbythereportingentitylessexchangerevenueearnedduringtheperiod. this is the “bottom line” of the',
39915:'statement of net costs. [see sffac 2, entity and display, pars. 8699 andappendix 1b; and omb bulletin 0109, form and',
39916:'content, section 4.8, “net cost of operations.”] net level premium reserve the excess, if any, of the present value of',
39917:'future guaranteed death endowment benefits over the present value of future net premiums. the net level premiumreserve should be calculated',
39918:'based on the dividend fund interest rate, if determinable, and mortality rates guaranteed in calculating the cash surrender values described',
39919:'in the contracts. aicpastatement of position 951 page 55 appendix e fasab handbook, version 20 06/21 appendix e net operating',
39920:'revenue or cost at the cfr level, the difference between the net cost of operations and, essentially, all non exchange',
39921:'revenue. sffas 24 net realizable value the estimatedamount that can be recoveredfromselling, oranyother method of disposingof an item less estimated',
39922:'costs of completion, holding and disposal. nominal dollar the dollarvalue assignedtoa goodorservicein termsof pricescurrent at thetime of thegoodor service is',
39923:'required. this contrasts with the value assigned to a good or service measured in constant dollars. nominal or face or',
39924:'par value oramount the amount of a bond, note, mortgage, or other security as stated in the instrument itself, exclusive',
39925:'of interest or dividend accumulations. the nominal amount may or may not coincide with the price at which the instrument',
39926:'was first sold, its present market value, or its redemption price. often referred to as the stated value. nonexchange revenue',
39927:'inflows of resources to the government that the government demands or that it receives by donations. the inflows that it',
39928:'demands include taxes, duties, fines, and penalties. nonexchange transaction atransaction that arises when one party to a transaction receives value',
39929:'without giving or promising value in return or one party to a transaction gives or promises value without receiving value',
39930:'in return. page 56 appendix e fasab handbook, version 20 06/21 appendix e nonexchange transaction insurance programs cover the risk',
39931:'of loss from adverse events through nonexchange transactions as defined in sffas 7. nonfederal individuals or entities individuals and entitiesacting',
39932:'in theirprivate capacitiesoutside of the authorityand control of the federal government. federal employees are nonfederal individuals when acting in their',
39933:'private capacities, e.g., with respect to their private retirement assets managed by a federal plan. nonfederal physical property physical properties',
39934:'financed by grants from the federal government, but owned by state and local governments. nonfriableacm refers to any material containing',
39935:'more than 1 percent asbestos as determined using the method specified in appendix e, subpart e, 40 cfr part 763,',
39936:'section 1, polarized light microscopy, that, when dry, cannot be crumbled, pulverized, or reduced to powder by hand pressure. 40',
39937:'cfr § 61.141 nonrecognized events subsequent events that provide evidence with respect to conditions that did not exist at the',
39938:'end of the reporting period but arose subsequent to that date. nonvalued fiduciaryassets fiduciary assets for which required disclosure does',
39939:'not include dollar values. nonvalued fiduciary assets may include land held in trust. fiduciary nonvalued assets should be disclosed in',
39940:'accordance with generally accepted accounting principles.10 10 inthefuture,the boardmayrequiredollarvaluesforcertaincategories. inthe eventofsuchachange inaccounting principles, the affected categories would no longer be',
39941:'included in nonvalued fiduciary assets. page 57 appendix e fasab handbook, version 20 06/21 appendix e normal or service cost',
39942:'the normal cost component of expense is the actuarial present value of the future cash outflows for which a reporting',
39943:'entity becomes obligated during the reporting period. for pensions, orb, and opeb, it represents that portion of the actuarial present',
39944:'value of benefits and expenses attributed to the valuation year by the benefit plan formula to work in covered employment',
39945:'or other service rendered by the participant in the period. the normal cost is a component of the annual expense',
39946:'and liability of the program and is not affected by the funded status of the plan. obligated balances the net',
39947:'amount of obligations in a given account for which payment has not yet been made. jfmip standardization project obligation following',
39948:'the enactment of budget authority and the completion of required apportionment action, government agencies incur obligations to make payments. obligations',
39949:'are binding agreements that will result in outlays immediately or in the future. obligations include, for example: current liabilities for',
39950:'salaries, wages, and interest; contracts for the purchase of supplies and equipment, construction, and the acquisition of office space, buildings,',
39951:'and land; and other arrangements requiring the payment of money. [see fy 2003 budget of the united states government: analytical',
39952:'perspectives, “budget system and concepts and glossary“ obligations incurred.] obligations amounts of orders placed, contracts awarded, services received, and other',
39953:'transactions occurring during a given period that would require payments during the same or a future period. jfmip standardization project',
39954:'offsetting collections collections from the public that result from businesstype or market oriented activities and collections from other government accounts.',
39955:'these collections are deducted from gross disbursements in calculating outlays, rather than counted in governmental receipts. some page 58 appendix',
39956:'e fasab handbook, version 20 06/21 appendix e offsetting collections are credited directly to appropriation or fund accounts; others, called',
39957:'offsetting receipts, are credited to receipt accounts. the authority to spend offsetting collections is a form of budget authority. omb,',
39958:'the budget system and concepts offsetting receipts offsetting receipts are a subset of offsetting collections. see collections. omb credit subsidy',
39959:'model computer software developed by omb for discounting cash flows in estimating credit subsidies. it uses agency cash flow inputs',
39960:'to compute the net present value at the point of disbursement and the subsidy rate associated with those cash flows.',
39961:'open group population those persons who are participating or who eventually will participate, during a specified period, in a social',
39962:'insurance program as contributors or beneficiaries. theyinclude, for example, current workers, retirees, survivors, disabled persons, and new participants entering the',
39963:'workforce or becoming beneficiaries, including those who will be born or immigrate to the united states in the future. opening',
39964:'balances account balancesthat exist at thebeginningofthe reportingperiod. opening balancesarebased upon the closing balances of the prior period and reflect the',
39965:'effects of transactions and events of prior periods and accounting policies applied in the prior period. opening balances also include',
39966:'matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.11 11 adopted fromauc 510,',
39967:'opening balances initial audit engagements, including reaudit engagements aicpa professional standards. page 59 appendix e fasab handbook, version 20 06/21',
39968:'appendix e operational land land or land rights predominantly used for general or administrative purposes. [see sffas 6 paragraph 20d.',
39969:'for the operational land subcategory functions]. operating lease an agreement conveying the right to use property for a limited time',
39970:'in exchange for periodic rental payments. [this definition will be rescinded when sffas 54, leases, becomes effective for reporting periods',
39971:'beginning after september 30, 2020. early adoption is not permitted.] operating materials and supplies operating materialsandsuppliesconsist of tangiblepersonalpropertytobe consumed innormal',
39972:'operations. excluded are: 1 goods that have been acquired for use in constructing real property or in assembling equipment to',
39973:'be used by the entity, 2 stockpile materials, 3 goods held underprice stabilization programs, 4 foreclosed property, 5 seized and',
39974:'forfeited property, and 6 inventory. opportunity cost the value of the alternatives foregone by adopting a particular strategy or employing',
39975:'resources in a specific manner. also calledalternative cost or economic cost. original classificationauthority is an individual authorized in writing, either',
39976:'by the president, the vice president, or by agency heads or other officials designated by the president, to classify information',
39977:'in the first instance. original discount rate the discount rate originally used to calculate the present value of direct loans',
39978:'or loan guarantee liabilities, when the direct or guaranteed loans were disbursed. [special term from sffas 2] page 60 appendix',
39979:'e fasab handbook, version 20 06/21 appendix e otheraccompanying information information that accompanies basic information and required supplementary information, but',
39980:'is not required by a body that establishes gaap. other financing sources inflows of resourcesthat increase net position of a',
39981:'reporting entity during the reporting period but that are not revenues or gains. they include appropriations used, transfers of assets',
39982:'from other government entities, and financing imputed with respect to any cost subsidies. financing outflows may result from transfers of',
39983:'the reporting entitys assetsto other government entities or from exchange revenues earned by the entity but required to be transferred',
39984:'to the general fund or another government entity. unexpended appropriations are recognized separately in determining net position but are not',
39985:'financing sources until used. other postemployment benefits opeb forms of benefits provided to former or inactive employees, their beneficiaries, and',
39986:'covered dependents outside pension or orb plans. other retirement benefits orb forms of benefits, other than retirement income, provided by',
39987:'an employer to retirees. those benefits may be defined in terms of specified benefits, such as health care, tuition assistance,',
39988:'or legal services, which are provided to retirees as the need for those benefits arises, such as certain health care',
39989:'benefits. or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified',
39990:'event, such as life insurance benefits. financial accounting standards board, statement of financialaccounting standard no. 106, employers’ accounting for postretirement',
39991:'benefits other than pensions outcome 1 defined in broad terms in sffac no. 1 para. 204208 as accomplishments or results',
39992:'that occur at least partially because of the service efforts of government entities. some authorities use terms like “impact,” “effect,”',
39993:'or “results” to distinguish the change in outcomes specifically caused by the government activity from the total change in conditions',
39994:'that can be caused by page 61 appendix e fasab handbook, version 20 06/21 appendix e many factors. 2 defined',
39995:'in sffas no. 8 as an assessment of the results of a program compared to its intended purpose. they shall:',
39996:'1 be capable of being described in financial, economic, or quantitative terms; and 2 provide a plausible basisfor concluding that',
39997:'the program hashad or will have this intended effect. for measuring outcomesfor research and development programs, resultsmay be reported by',
39998:'a narrative discussion of the major results achieved bythe program during the year. see sffas no. 8, supplementary stewardship reporting,',
39999:'para. 93 & 99, and sffac no. 1, objectives of federal financial reporting, paras. 204208, for further discussion of outcome.',
40000:'outlay the issuance of checks, disbursement of cash, or electronictransfer of fundsmade to liquidate a federal obligation. outlays also occur',
40001:'when interest on the treasury debt held by the public accrues and when the government issues bonds, notes, debentures, monetary',
40002:'credits, or other cashequivalent instruments in order to liquidate obligations. also, under credit reform, the credit subsidy cost is recorded',
40003:'as an outlay when a direct or guaranteed loan is disbursed. gao budget glossary output atabulation, calculation, or recording of',
40004:'activity or effort that can be expressed in a quantitative or qualitative manner. they shall have two key characteristics: 1',
40005:'they shall be systematically or periodically captured through an accounting or management information system, and 2 there shall be a',
40006:'logical connection between the reported measures and the program’s purpose. output measure atabulation, calculation, or recording of activity or effort',
40007:'that can be expressed in a quantitative or qualitative manner. it shall have two key characteristics: 1 it shall be',
40008:'systematically or periodically captured through accounting or management information system, and 2 there shall be a logical connection between the',
40009:'reported measures and the program’s purpose. ownership interest the possession of substantially all of the benefits and risks incident to',
40010:'ownership. page 62 appendix e fasab handbook, version 20 06/21 appendix e partial impairment less than full or total impairment.',
40011:'payroll withholdings amounts that are withheld from payment of wages to an employee and subsequently remitted to other payees, such',
40012:'as federal, state or local governments; or health or life insurance providers, on behalf of the employee. performance measurement ameans',
40013:'of evaluating efficiency, effectiveness, and results. abalanced performance measurement scorecard includes financial and nonfinancial measures focusing on quality, cycle time,',
40014:'and cost. performance measurement should include program accomplishments in terms of outputs quantity of products or services provided, e.g., how',
40015:'many items efficiently produced? andoutcomesresultsof providing outputs, e.g., areoutputseffectivelymeetingintendedagency mission objectives?. seestatementof federalfinancialaccountingconceptsno. 1, objectives of federal financial reporting, para.',
40016:'192. policyassumptions policy assumptions address the factors under the direct control of the federal government concerning the taxes and other',
40017:'receipts to be received by the federal government and the public services to be provided by the federal government. policy',
40018:'assumptions address projected spending rules for both mandatory and discretionary spending as well as the framework for assessing taxes and',
40019:'fees. post1991 direct loans direct loans obligated after september 30, 1991. [special term from sffas 2] post1991 loan guarantees loan',
40020:'guarantees committed after september 30, 1991. [special term from sffas 2] page 63 appendix e fasab handbook, version 20 06/21',
40021:'appendix e postmodification liability the present value of the net cash outflows of the loan guarantees estimated at the time',
40022:'of modification under the postmodification terms, and discounted at the interest rate applicable to the time whenthemodification occurson marketabletreasury securitiesthat',
40023:'have acomparable maturity to the remaining maturity of the guaranteed loans under postmodification terms simply stated, the postmodification terms at',
40024:'the current rate. special term from sffas 19 postmodification value the present value of the net cash inflows of direct',
40025:'loans estimated at the time of modification under postmodification terms and discounted at the interest rate applicable to the time',
40026:'when the modification occurs on marketable treasury securities that have a comparable maturity to the remaining maturity of the direct',
40027:'loans under postmodification terms simply stated, the post modification terms at the current rate. special term from sffas 19 predominant',
40028:'use of land the major or primary current use of an asset during the reporting period and does not include',
40029:'incidental or infrequent uses of the asset. an assets predominant use should be consistent with the entitys authorizing legislation but',
40030:'may not always be consistent with the original intent or reason why the asset was initially acquired. premiums is a',
40031:'general term used to refer to exchange revenue billed by insurance programs. programs may refer to their exchange revenue by',
40032:'various terms, including but not limited to premiums, assessments, and/or fees. premodification value the present value of the net cash',
40033:'inflows of direct loans estimated at the time of modification under premodification terms and discounted at the interest rate applicable',
40034:'to the time when the modification occurs on marketable treasury securities that have a comparable maturity to the remaining maturity',
40035:'of the direct loans under premodification terms simply stated, the premodification terms at the current rate. special term from sffas',
40036:'19 page 64 appendix e fasab handbook, version 20 06/21 appendix e premodification liability the present value of the net',
40037:'cash outflows of loan guarantees estimated at the time of modification under the premodification terms and discounted at the interest',
40038:'rate applicable to the time whenthemodification occurson marketabletreasury securitiesthat have acomparable maturity to the remaining maturity of the guaranteed loans',
40039:'under premodification terms simply stated, the premodification terms at the current rate. special term from sffas 19 pre1992 loan guarantees',
40040:'loan guarantees committed before october 1, 1991. [special term from sffas 2] pre1992 direct loans direct loans obligated before october',
40041:'1, 1991. [special term from sffas 2] premium deficiency acondition under which a liability for future policy benefits using current',
40042:'conditions exceeds the liability for future policy benefits using contract conditions. in such cases, the difference should be recognized as',
40043:'a charge to operations in the current period. present value pv the value of future cash flows discounted to the',
40044:'present at a certain interest rate such as the reporting entitys cost of capital, assuming compound interest. adapted from kieso',
40045:'and weygandt, intermediate accounting, 7th ed., page 264. present value represents the amount of money that if invested today would',
40046:'grow to a specified amount in the future. present value is an adjusted amount that takes the time value of',
40047:'money intoconsideration. the timevalueofmoney isillustratedbyaquestionsuchas: attenpercent interest compounded annually, how much do i need to put into the bank today',
40048:'in order to have $110 one year from today? the amount you would need today would be $100. therefore, the',
40049:'present value of $110 in this example would be $100. page 65 appendix e fasab handbook, version 20 06/21 appendix',
40050:'e principal financial statements see sffac 2, paragraph 74, for a listing of the financial statements and other information that',
40051:'a financial report should include. the fasab considers principal financial statements an essential part of a reporting entity’s financial reporting,',
40052:'and therefore recommendsauthoritative guidelines for the measurement and presentation of the information. [sffac 2, entity and display, paragraph 71, footnote',
40053:'12.] see also basic financial statements prior service costs the cost of retroactive benefits granted in a plan amendment or',
40054:'accomplished through administrative change, legislation, or other means. in some cases there will not be a formal plan per se',
40055:'to amend, for example, certain postemployment benefits, and a program is amended through other means than a formal amendment. probable',
40056:'that which can reasonably be expected or believed to be more likely than not on the basis of available evidence',
40057:'or logic but which is neither certain nor proven. process the organized method of converting inputs people, equipment, methods, materials,',
40058:'and environment, to outputs products or services. the natural aggregation of work activities and tasks performed for program delivery. process',
40059:'costing amethod of cost accounting that first collects costs by processes and then allocates the total costs of each process',
40060:'equally to each unit of output flowing through it during an accounting period. page 66 appendix e fasab handbook, version',
40061:'20 06/21 appendix e process valueanalysis tools and techniques for studying processes through customer value analysis. its objective is to',
40062:'identify opportunities for lasting improvement in the performance of an organization. it provides an indepth reviewof work activitiesand tasks, throughactivityanalysis,',
40063:'which aggregate to form processes for agency program delivery. in addition to activitybased costing, quality and cycle time factors are',
40064:'studied for a complete analysis of performance measurement. each activity within the process is analyzed, including whether or not the',
40065:'activity adds value for the customer. product any discrete, traceable, or measurable good or service provided to a customer. often',
40066:'goods are referred to as tangible products, and services are referred to as intangible products.agood or service is the product',
40067:'of a process resulting from the consumption of resources. programaccount the budget account into which an appropriation to cover the',
40068:'subsidy cost of a direct loan or loan guarantee program is made and from which such cost is disbursed to',
40069:'the financing account. usually, a separate amount for administrative expenses is also appropriated to the program account. omb circular a11',
40070:'projected unit creditactuarial method amethod under which the projected benefits of each individual included in an actuarial present valuation are',
40071:'allocated by a consistent formula to valuation years. the actuarial present value of benefits allocated to the valuation year is',
40072:'called the normal cost. the actuarial present value of benefits allocated to all periods before a valuation year is called',
40073:'actuarial liability. actuarial standard of practice projection the term projection refers to prospective financial information, including but not limited to',
40074:'prospective financial statements, based on one or more hypothetical assumptions of sets of assumptions. the hypothetical assumptions relate to future',
40075:'conditions and actions that may page 67 appendix e fasab handbook, version 20 06/21 appendix e occur, but which are',
40076:'not necessarily deemed probable unlike the case with forecasts. both forecasts and projections may contain a range. as used in',
40077:'statement of federal financialaccounting standards 36, longterm projections for the u.s. government, a projection is the calculation of future data',
40078:'based upon the application of trends to present data. projections of deficits, or surpluses, and debt are a central feature',
40079:'of fiscalsustainabilityreporting. projectionsarenotforecastsorpredictions;theyaredesignedto depict results that may occur under various conditionsfor example, what if current policy without change regarding federal',
40080:'government public services and taxation are continued in the future? projections are useful in order to display alternative future scenarios,',
40081:'but it is important to clearly explain the nature of the information being presented. property, detained property taken into custody',
40082:'temporarily for purposes of preserving the status quo items in or around a crime scene or to protect the government',
40083:'from liability for loss luggage of an arrested traveler, vehicle of an arresteddrunkdriver, or determining customsadmissibility, with the intent to',
40084:'release the property as soon as it is no longer necessary to preserve the status quo or the owner can',
40085:'assume responsible custody. this action is not a seizure under the law and thus detained property is not considered seized',
40086:'property. property, embargoed property that may be legal to possess or own in the u.s., but whose import/export is prohibited',
40087:'e.g., iranian carpets, cuban cigars. property, forfeited property of any type currency, monetary interests, realty, intangible property, and tangible personal',
40088:'property for which title has vested in the federal government, over any other asserted legal interest in the property, by',
40089:'exercise of a legal forfeiture process. property, plant,and equipment, general pp&e used to provide government services or goods. the cost',
40090:'of general pp&e is capitalized, i. e. recorded as assets on the balance sheet. for detailed characteristics of and accounting',
40091:'for general pp&e, see paragraphs 23 through 34, sffas no. 6. page 68 appendix e fasab handbook, version 20 06/21',
40092:'appendix e property, prohibited property for which no private right of ownership is recognized under u.s. law, or of which',
40093:'mere private possession is prohibited under u.s. law. examples include certain controlled substances, counterfeit currency, counterfeit monetary and financial instruments,',
40094:'and certain firearms. this property is a type of seized property. property, seized property of any type currency, monetary interests,',
40095:'realty, intangible property, and tangible personal property over which the federal government has exercised its power under law to assert',
40096:'possession and control in opposition to any other party asserting a legal interest in the property. seized for evidence property',
40097:'the federal government has seized for the sole purpose of preservingand protecting thepropertyfor possible useincivilorcriminal judicial proceeding. the expectation is',
40098:'that the property will be returned to its rightful owners upon conclusion of the judicial proceedings. however, circumstances can allow',
40099:'the status of property seized for evidence to change to property seized for forfeiture. seized for forfeiture property the federal',
40100:'government has seized for the purpose of transferring title to the federal government through exercise of a legal forfeiture process.',
40101:'this includes property seized for forfeiture that also may be used in an evidentiary proceeding. seized for tax purposes property',
40102:'the federal government has seized for the purpose of satisfying a tax liability to the federal government through exercise of',
40103:'a legal tax enforcement process. this includes property seized for tax purposes that also may be used in an evidentiary',
40104:'proceeding. seized for other purposes property the federal government has seized for purposes other than forevidence, forforfeiture,orfortaxpurposes. examplesof propertyinthiscategoryinclude seizures',
40105:'for satisfaction of debts owed the government, for protection of public safety or navigation adrift vessel, and for preservation of',
40106:'environmental conditions sinking vessel. this includes property seized for these other governmental purposes that also may be used in an',
40107:'evidentiary proceeding. page 69 appendix e fasab handbook, version 20 06/21 appendix e proprietaryaccounting also known as financial accounting, a',
40108:'process that supports accrual accounting and financial reporting that attempts to show actual financial position and results of operations by',
40109:'accounting for assets, liabilities, net position, revenues, and expenses. see tierney, cornelius e., handbook of federal accounting practices, reading massachusetts:addisonwesley,',
40110:'1982:122. public domain land landthat wasoriginallycededtothe united statesbytreaty,purchase,orconquest incontrast to acquired lands, which have been purchased by, given to, exchanged',
40111:'with, or transferred through condemnation proceedings to the federal government. publicprivate partnerships federal publicprivate partnerships p3s are risksharing arrangements or',
40112:'transactions with expected lives greater than five years between public and private sector entities. such arrangements or transactionsprovide a service',
40113:'or an asset for government and/or general public use where in addition to the sharing of resources, each party shares',
40114:'in the risks and rewards of said arrangements or transactions. p3 structuralarrangement p3s that are external to the government sponsors',
40115:'or entitys operations and often involve the creation of an spv, trust, or limited partnership lp, and other such arrangements.',
40116:'for example, military base housing. p3 transactionalarrangement p3sthat are internalto thegovernment sponsorsorentitysoperations. forexample, workshare programs not involving the creation of',
40117:'a spv, trust, or lp, etc. page 70 appendix e fasab handbook, version 20 06/21 appendix e public services in',
40118:'federal financial reporting, public services refers to all goods, benefits and services provided by the government. federal public services include',
40119:'but are not limited to the provision of goods, cash such as social security benefits or other financial benefits such',
40120:'as loan guarantees, as well as national defense, national security, transportation safety and the operation of national parks. purchases method',
40121:'amethod of accounting for goods, such as materials and supplies, in which the acquisition cost is recognized as an expense',
40122:'upon purchase of the goods rather than upon their use. railroad retirement program afederal program somewhat similar to social security,',
40123:'designed for workers in the railroad industry. the provisions of the railroad retirementact provide for a system of coordination and',
40124:'financialinterchangebetweentherailroadretirementprogramandthe socialsecurityprogram. reappropriation enacted legislation that continues the availability of unexpended funds that expired or would otherwise expire. jfmip standardization',
40125:'project reasonably estimable the ability to reliably quantify in monetary terms the outflow of resources that will be required. tr',
40126:'2 receipts collections that result from the government’s exercise of its sovereign power to tax or otherwise compel payment, and',
40127:'gifts of money to the government. page 71 appendix e fasab handbook, version 20 06/21 appendix e receivership receivership is',
40128:'the legal procedure for winding down the affairs of an insolvent institution.12 receiving entity an entity to which functions are',
40129:'transferred. technical bulletin 20031 recognition or recognize the term recognition bears the same meaning as used by the financialaccounting standards',
40130:'board in its conceptual statements. recognition is the process of formally recording or incorporating an item into the financial statements',
40131:'of an entity as an asset, liability, revenue, expense, or the like. arecognized item is depicted in both words and',
40132:'numbers, with the amount included in the statement totals. recognition comprehends both initial recognition of an item and recognition of',
40133:'subsequent changes in or removal of a previously recognized item. financial accountingstandardsboard,statementoffinancialaccountingconceptsno. 5, a replacement of fasb concepts statement no.',
40134:'3, para. 6. recognize to determine the amount, timing, classification, and other conditions precedent to the acceptance and entry of',
40135:'a transaction. hence, to give expression on the books of account; said of transactions. recognized events subsequent events that provide',
40136:'additional evidence with respect to conditions that existed at the end of the reporting period and affect the estimates inherent',
40137:'in the process of preparing basic information and rsi. 12 managing the crisis: the fdic and rtc experience, appendix b',
40138:'list ofabbreviations and glossary of terms; available online at http://www.fdic.gov/bank/historical/managing/; last accessed october 11, 2012. page 72 appendix e fasab',
40139:'handbook, version 20 06/21 appendix e record to give expression to a transaction on or in the books of account;',
40140:'to enter. recourse the rights of a holder in due course of a financial instrument such as a loan to',
40141:'force the endorser on the instrument to meet his or her legal obligations for making good the payment of the',
40142:'instrument if dishonored by the maker or acceptor. the holder in due course must have met the legal requirements of',
40143:'presentation and delivery of the instrument to the maker of a note or acceptorofa draft and must havefound that thislegalentityhasrefused',
40144:'topayforordefaultedin payment of the instrument. recoveries include monies: returned from another agency through an indemnification agreement, a third party or',
40145:'commercial insurance company to repay all or part of a loss originally paid for by the program, recouped from the',
40146:'sale of salvageable parts through acquisition and disposal or salvage of assets, and/or received from adjustments to previously paid insurance',
40147:'claims. reestimate refers to estimates of the subsidy costs performed subsequent to their initial estimates made at the time of',
40148:'a loan’s disbursement. regulatedacm refers to a friableacm, b category i nonfriableacm that has become friable, c category i nonfriableacm',
40149:'that will be or has been subjected to sanding, grinding, cutting, or abrading, or d category ii nonfriableacm that has',
40150:'a high probability of becoming or has become crumbled, pulverized, or reduced to powder by the forces expected to act',
40151:'on the material in the course of demolition or renovation operations regulated by this subpart. 40 cfr § 61.141 page',
40152:'73 appendix e fasab handbook, version 20 06/21 appendix e reimbursements sums received as payment or advance payment for goods',
40153:'or services furnished either to the public or to another federal government account. if authorized by law, these sums are',
40154:'credited directly to specific appropriation and fund accounts. these amounts are deducted from the total obligations incurred and outlays in',
40155:'determining net obligations and outlays for such accounts. budget glossary reimbursements are offsetting collections. see offsetting collections. related parties organizations',
40156:'are considered to be related parties in the gpffr if the existing relationship or onepartyto theexistingrelationshiphastheabilitytoexercise significantinfluenceoverthe other party’s policy',
40157:'decisions. relationship, as used in this context, refers to material transactions or events involving both parties. repairable an inventory item',
40158:'that is expected to be repaired when broken or worn out. replacement cost the cost to reproduce an inventory item',
40159:'by purchase or manufacture. in lower of cost or market computations, the term “market” means replacement cost, subject to ceiling',
40160:'and floor limitations. replacement cost sffac 7 replacement cost is the amount required for an entity to replace the remaining',
40161:'service potential of an existing asset in a current transaction at the reporting date, including the amount that the entity',
40162:'would receive from disposing of the asset at the end of its useful life. reporting entity reporting entities are organizations',
40163:'that issue a gpffr because either there is a statutory or administrative requirement to prepare a gpffr or they choose',
40164:'to prepare one. the term page 74 appendix e fasab handbook, version 20 06/21 appendix e reporting entity may refer',
40165:'to either the governmentwide reporting entity or a component reporting entity. statement of federal financialaccounting concepts sffac 2 provides criteria',
40166:'for an entity to be a reporting entity. the criteria focus on whether: a. anentitysmanagementisresponsibleforcontrollinganddeployingresources,producing outputs and outcomes, and executing',
40167:'the budget or a portion thereof assuming that the entity is included in the budget, and is held accountable for',
40168:'the entitys performance. b. an entitys financial statements would provide a meaningful representation of operations and financial condition. c. an',
40169:'entitys financial information could be used by nterested parties to help them make resource allocation and other decisions and hold',
40170:'the entity accountable. required information information that consists of basic and required supplementary information. required supplementary information information that a',
40171:'body that establishes gaap requires to accompany basic information. when an auditor is engaged to audit an entitys financial statements,',
40172:'basic information is subject to testing for fair presentation in conformity with gaap. however, rsi for federal entities is unaudited',
40173:'but subject to certain procedures specified by generallyaccepted government auditing standards for rsi. required supplementary stewardship information rssi 1 information',
40174:'reported outside the principal financial statements that is an essential part of an entity’s financial reporting; therefore the statement contains',
40175:'recommendations for its measurement and presentation. 2 the category defined by the board for reporting information required by the stewardship',
40176:'standards. stewardship information may be presented as rssi, in the financial statements, or in the notes to them. stewardship information',
40177:'will be necessary for a fair presentation of financial position and results of operations. page 75 appendix e fasab handbook,',
40178:'version 20 06/21 appendix e researchand development federal investment in research and development refers to those expensesincurred in support of',
40179:'the search for new or refined knowledge and ideas and for the application or use of such knowledge and ideas',
40180:'for the development of new or improved products and processes with the expectation of maintaining or increasing national economic productive',
40181:'capacity or yielding other future benefits. research and development is composed of basic research, applied research, and development. responsibility segment',
40182:'asignificant organizational, operational, functional, or process component which has the following characteristics: a its manager reports to the entity’s top',
40183:'management; b it is responsible forcarrying outa mission,performingaline of activitiesor services, orproducing one or a group of products; and c',
40184:'for financial reporting and cost management purposes, its resources and results of operations can be clearly distinguished, physically and operationally,',
40185:'from those of other segments of the entity. responsibility center an organizational unit headed by a manager or a group',
40186:'of managers who are responsible for its activities. responsibility centers can be measured as revenue centers accountable for revenue/sales only,',
40187:'cost centers accountable for costs/expenses only, profit centers accountable for revenues and costs, or investment centers accountable for investments, revenues,',
40188:'and costs. restatement of direct loans or loan guarantees refers to establishing a new book value of a direct loan',
40189:'or the liability of a loan guarantee. revenue see exchange revenue and nonexchange revenue. page 76 appendix e fasab handbook,',
40190:'version 20 06/21 appendix e revenueadjustment acontra revenue account that is used to report reduction in revenue when realization is',
40191:'not probable less likely than not. it includes, returns, allowances, and price redeterminations but not credit losses due to the',
40192:'inability of the debtor to pay the established or negotiated price. revolving fund afund consisting of permanent appropriation and expenditures',
40193:'of collections, from both the public and other governmental agencies and accounts, that are earmarked to finance a continuing cycle',
40194:'of businesstype operations. omb circular a34 risk category subdivisions of a cohort of direct loansor loan guarantees into groups of',
40195:'loans that are relatively homogeneous in cost, given the facts known at the time of obligation or commitment. risk categories',
40196:'will group all loans obligated or committed for a program during the fiscal year that share characteristics predictive of defaults',
40197:'and other costs. omb circular a11 riskfree interest rate the rate on riskfree monetaryassetsthat have maturitydatesor durationsthat coincide with the',
40198:'period covered by the cash flows. see time value of money below. seized property seized property includes monetary instruments, real',
40199:'property and tangible personal property of others in the actual or constructive possession of the custodial agency. seizingagency the agency',
40200:'that seizes property as a part of its law enforcement activities. page 77 appendix e fasab handbook, version 20 06/21',
40201:'appendix e selling expense cost expensesincurred in selling or marketing, e.g., salaries, commissions, and promotion expenses. sensitive items items that',
40202:'could be a hazard or threat to public safety or the economy in federal custody that would cause discredit or',
40203:'embarrassment to the federal government if it lost accountability over those items. service an intangible product or task rendered directly',
40204:'to a customer. service utility the usable capacity that at acquisition was expected to be used to provide service. settlementamount',
40205:'settlement amount is the amount at which an asset can be realized or a liability can be liquidated. short term',
40206:'lease a shortterm lease is a lease with a lease term of 24 months or less. social securityact the social',
40207:'securityact governs most operations of the social security program. the original social securityact is public law 74271, enactedaugust 14, 1935.',
40208:'with subsequent amendments, the social securityact consists of 20 titles, of which four have been repealed. the oasdi program is',
40209:'authorized by title ii of the social securityact. page 78 appendix e fasab handbook, version 20 06/21 appendix e social',
40210:'insurance programs income transfer programs financed by compulsory earmarked taxes and also, in certain cases, general revenues of the federal',
40211:'government. also see separate definition of insurance and guarantees. special fund federal fund accounts for receipts earmarked for specific purposes',
40212:'and the associated expenditure of those receipts. omb, the budget system and concepts special purpose vehicles spvs also commonly called',
40213:'special purpose entities spes, are entities created for a specific, limited and normallytemporarypurpose. anspv can be a corporation, trust, partnership,',
40214:'limitedliability company or some type of variable interest entity vie. they are often an integral part of public private partnerships',
40215:'because of their riskcontainment nature of isolating participating entities from financial risk. specific identification an inventory system in which the',
40216:'seller identifies which specific items are sold and which remain in ending inventory. spreadsheets computer code, often a collection of',
40217:'programs, used to make calculations e.g., cash flow estimates according to the proposed models and assumptions. spreadsheets are not models',
40218:'although the term “spreadsheet model” is sometimes used. standard costing acosting method that attaches costs to cost objects based on',
40219:'reasonable estimates or cost studies and by means of budgeted rates rather than according to actual costs incurred. the anticipated',
40220:'cost of producing a unit of output. apredetermined cost to be assigned to products page 79 appendix e fasab handbook,',
40221:'version 20 06/21 appendix e produced. standard cost implies a norm, or what costs should be. standard costing may be',
40222:'based on either absorption or direct costing principles, and may apply either to all or some cost elements. standard costs',
40223:'predetermined expected unit costs, which are acceptable for financial reporting purposes if adjusted periodically to reflect actual results. stateand local',
40224:'governments state and local governments generally include: the 50 states and the district of columbia; cities, counties, townships, school districts,',
40225:'special districts, public authorities, and other local governmental units as defined by the bureau of the census; and puerto rico,',
40226:'the virgin islands, and other us territories. stewardship the federal government’s responsibility for the general welfare of the nation in',
40227:'perpetuity. stewardship investments items recognized as expense in calculating net cost, but meriting special treatment to highlight the substantial investment',
40228:'and longterm benefit of the expenses. this would include nonfederal physical property, human capital, and research and development. stewardship land',
40229:'public domain and acquired land and land rights owned by the federal government intended to be held indefinitely. [see sffas',
40230:'29 paragraph 33. for examples of stewardship land reserved, managed, planned, used, or acquired for.] page 80 appendix e fasab',
40231:'handbook, version 20 06/21 appendix e stewardship responsibilities the projected financial impact on the government of sustaining the current services',
40232:'that it provides pursuant to laws already enacted. the commitments and constraints reflected in “current services” are inherent in the',
40233:'tax and spending policies contained in current law. subsequent events events or transactions that affect the basic information or rsi',
40234:'that occur subsequent to the end of the reporting period but before the financial report is issued. subsidy cost the',
40235:'cost of a grant of financial aid, usuallyby a governmental body, to some person or institution for particular purposes. credit',
40236:'subsidy cost is the estimated longterm cost to the government of direct loans or loan guarantees calculated on a net',
40237:'present value basis, excluding administrative costs. adaptedfromomb circular a11directloan subsidycostisthe estimatedlongtermcost to the government of direct loans calculated on a',
40238:'present value basis, excluding administrative costs. the cost is the present value of estimated net cash outflows at the time',
40239:'the direct loans are disbursed. the discount rate used for the calculation is the average interest rate yield on marketable',
40240:'treasury securities of similar maturity to the loan, applicable to the time when the loans are disbursed. adapted from omb',
40241:'circular a11 loan guarantee subsidy cost is the estimated longterm cost to the government of loan guarantees calculated on a',
40242:'present value basis, excluding administrative costs. the cost is the present value of estimated net cash outflowsat the time the',
40243:'guaranteed loansare disbursedbythe lender. the discount rate used for the calculation is the average interest rate yield on marketable treasury',
40244:'securities of similar maturityto the loan guarantees, applicable to the time when the guaranteed loans are disbursed. adapted from omb',
40245:'circular a11 support costs costs of activities not directly associated with production. typical examples are the costs of automation support,',
40246:'communications, postage, process engineering, and purchasing. page 81 appendix e fasab handbook, version 20 06/21 appendix e tax expenditures the',
40247:'congressional budget and impoundment control act of 1974 public law 93344 defines taxexpendituresas “revenuelossesattributable to provisionsofthefederaltaxlawswhichallow aspecial exclusion, exemption, or',
40248:'deductionfromgrossincome orwhichprovidea specialcredit, a preferential rate of tax, or a deferral of tax liability.” while the term “revenue losses” is',
40249:'used in the statutory definition, tax expenditures have traditionally been measured as reductions in federal tax revenues relative to normal',
40250:'baseline provisions of an individual and corporate income tax system, which were properly approved and authorized by the congress to',
40251:'accomplish identified policy objectives, recognizing that federal tax revenues would be reduced. tax gap an estimate of taxes including duties',
40252:'that are unpaid because of noncompliance with existing laws and regulations. taxable payroll taxable wages and taxable selfemployment income. when',
40253:'multiplied by the combined employeeemployer tax rate, it yields the total amount of taxes incurred by employees, employers, and the',
40254:'selfemployed for work during the period. terminal dividends dividends to policyholders calculated and paid upon termination of a contract, such',
40255:'as on death, surrender, or maturity. if the payment of terminal dividends is probable and the amount can be reasonably',
40256:'estimated, the liability should be recognized. aicpastatement of position 951. time value of money the time value of money is',
40257:'represented by the rate on riskfree monetary assets that have maturity dates or durations that coincide with the period covered',
40258:'by the cash flows riskfree interest rate. for present value computations denominated in nominal u.s. dollars, the yield curve for',
40259:'u.s. treasury securities determines the appropriate riskfree interest rate. u.s. page 82 appendix e fasab handbook, version 20 06/21 appendix',
40260:'e treasury securities are deemed default risk free because they pose neither uncertainty in timing nor risk of default to',
40261:'the holder. title the right to property; the means by which such right is established. total cost method an accountingmethod',
40262:'that includesthe actualacquisitioncost of eachitemheldplusthe costsof any additions, improvements, alterations, rehabilitations, or replacements that extend the useful life of an',
40263:'asset. total full impairment gpp&e is no longer capable of providing service in the operations of the entity prior to',
40264:'the end of its estimated useful life. traceability the ability to assign a cost directly to a specific activity or',
40265:'cost object by identifying or observing specific resources consumed by the activity or cost object. transaction aparticular kind of external',
40266:'event involving the transfer of something of value concerning two or more entities. the transfer may be a two way',
40267:'or one way flow of resources or of promises to provide resources. adapted fromfinancialaccounting standardsboard, statement of financial accounting concepts',
40268:'no. 6, elements of financial statements page 83 appendix e fasab handbook, version 20 06/21 appendix e transferred entity an',
40269:'entity preparing standalone financial statements consolidated with a legacy entity’s financial statements prior to transfer and with a receiving entity’s',
40270:'financial statements after transfer. technical bulletin 20031 transfers betweenappropriation/fundaccounts occur when all or part of the budget authority in one',
40271:'account is transferred to another account when such transfers are specifically authorized by law. the nature of the transfer determines',
40272:'whether the transaction is treated as an expenditure transfer or a nonexpenditure transfer. jfmip standardization project treasury warrant an official',
40273:'document that the secretary of the treasury issues pursuant to law and that establishes the amount of monies authorized to',
40274:'be withdrawn from the central accounts that treasury maintains. warrants for currently unavailable special and trust fund receipts are issued',
40275:'when requirements for their availability have been met. gao budget glossary trust funds the term trust funds is often colloquially',
40276:'used to refer to trust fundaccounts see definition below. although earmarked monies are predominantly in funds that are designated by',
40277:'law as trust funds, the meaningof theterm trust inthefederal government differs significantlyfromits meaning in the private sector. whereas earmarked funds',
40278:'in the federal government are distinct from fiduciary activities, a trust in the private sector necessarily involves a fiduciary relationship.',
40279:'an earmarked fund should not be characterized as a trust in general purpose external financial reportsoffederalentities. theuseof the term trust',
40280:'fund isacceptableonlyin thefundsofficial title. trust fundaccounts accounts that are designated by law as trust funds, for receipts earmarked for specific',
40281:'purposes and the associated expenditure of those receipts. collections may come from the public e.g., earmarked taxes or user charges',
40282:'or from intrabudgetary transfers. more than 150 federal page 84 appendix e fasab handbook, version 20 06/21 appendix e government',
40283:'trust funds exist, of which the largest and best known finance several major benefit programs including social security and medicare',
40284:'and certain infrastructure spending the highway and theairport andairway trust funds. trust revolving funds accounts that record permanent appropriation and',
40285:'expenditure of collections used to carry out a cycle of business type operationsin accordance with a statute that designatesthe fund',
40286:'asa trust fund. omb circular a34 trustees, boards of, oasdiand medicare boards established bythe social securityact to oversee the financial',
40287:'operations of the oldage, survivors,and disabilityinsurance “socialsecurity” or oasdi, the hospitalinsurancehi,and the supplementary medical insurance smi trust funds. the boards',
40288:'are composed of six members, four of whom serve automatically by virtue of their positions in the federal government: the',
40289:'secretaries of treasury the managing trustee, labor, and health and human services and the commissioner of social security since march',
40290:'1995. the other two members are appointed bythepresident andconfirmed bythesenatetoserveaspublicrepresentativesto serve 4 year terms. uncontrollable cost the cost over which',
40291:'a responsible manager has no influence. unemployment insurance ui the ui program was created in 1935 to provide income assistance',
40292:'to unemployed workers who have lost their jobs through no fault of their own. the ui program is administered through',
40293:'a unique system of federalstate partnerships, established in federal law but executed by state officialsthroughconforming statelaws. thefederal government providesbroad policyguidance',
40294:'and program direction through the oversight of the u.s. department of labor. the ui program is financedbyfederalandstateunemployment taxes. federalunemploymenttaxesareusedtopay forthe',
40295:'uiadministrative costs,topaythe federal shareof extendedui benefits, andto maintaina loan account from which states may borrow to pay ui benefits. state',
40296:'ui taxes are used exclusively for the payment of regular ui benefits and the state’s share of extended benefits. in',
40297:'addition to the federal tax, individual states finance their ui programs through state tax page 85 appendix e fasab handbook,',
40298:'version 20 06/21 appendix e contributions from subject employers on the wages of covered employees. three states also collect contributions',
40299:'from employees. within federal guidelines, state tax rates are assigned in accordance with an employer’s experience with unemployment. actual tax',
40300:'rates vary greatly among the states. unit cost the cost of a selected unit of a good or service. examples',
40301:'include dollar cost per ton, machine hour, labor hour, or department hour. unobligated balances balances of budgetary resources that have',
40302:'not yet been obligated. jfmip standardization projectunobligatedbalancesexpireceasetobeavailablefor obligationfor:—1yearaccounts at theend of the fiscal year;—multipleyear accountsat the end of theperiod specified;—noyear',
40303:'accounts only when they are 1 rescinded by law, 2 purpose is accomplished, or 3 when disbursements against the appropriation',
40304:'have not been made for 2 full consecutive years. gao budget glossary. unreservedassertion an unconditional statement. useful life the normal',
40305:'operating life in terms of utility to the owner. valuationaccount allowance or reserve an account that partly or wholly offsets',
40306:'one or more other accounts; for example, accumulated depreciation is a valuation account related to specific depreciable assets and allowance',
40307:'for bad debts is a valuation account related to accounts receivable. if a valuation account is deducted from the related',
40308:'asset or liability it is sometimes referred to as a contraasset or contraliability account. page 86 appendix e fasab handbook,',
40309:'version 20 06/21 appendix e valuation oraccounting valuation valuation methods and bases are numerous and varied; and may be expressed',
40310:'quantitatively andin monetaryterms.application maybe madeto asingle asset, agroupof assets, oranentire enterprise, as determined by various bases and methods. valuation date',
40311:'adate as close to the end of the fiscal year being reported upon as possible and no more than one',
40312:'year prior to the end of the reporting year. valueaddedactivity an activity that is judged to contribute to customer value',
40313:'or satisfy an organizational need. the attribute “valueadded” reflectsa belief that theactivity cannot be eliminated without reducing the quantity, responsiveness,',
40314:'or quality of output required by a customer or organization. value added activities should physically change the product or service',
40315:'in a manner that meets customer expectations. value for money vfm vfm is defined as the optimum combination of wholeoflife',
40316:'costs and quality or fitness for purpose of the good or service to meet the users requirement. vfm is not',
40317:'the choice of goods and services based on the lowest cost bid. to undertake a wellmanaged procurement, it is necessary',
40318:'to consider upfront, and at the earliest stage of procurement, what the key drivers of vfm in the procurement process',
40319:'will be. in other words, vfm is a much broader concept than typical costbenefit analysis because it emphasizes value in',
40320:'more of a qualitative than quantitative manner. quantitatively, some vfm models use a projects internal rate of return irr to',
40321:'help determine project acceptability. value in use value in use is the benefit to be obtained by an entity from',
40322:'the continuing use of an asset and from its disposal at the end of its useful life. page 87 appendix',
40323:'e fasab handbook, version 20 06/21 appendix e variable cost acost that varies with changes in the level of an',
40324:'activity, when other factors are held constant. the cost of material handling to an activity, for example, varies according to',
40325:'the number of material deliveries and pickups to and from that activity. variable value securities securities that have unknown redemption',
40326:'or maturity values at the time of issue. values of these securities can vary on the basis of regulation or',
40327:'specific language in the offering. variance 1 the amount, rate, extent, or degree of change, or the divergence from a',
40328:'desired characteristicorstate. 2the differencefor ayear orlessbetweenthe elementsdirect material, direct labor, factory overhead of standard cost and actual cost. the term',
40329:'applies to a a money difference or b changes in the character or purpose of amounts expended. weightedaverage aperiodic inventory',
40330:'costing method where ending inventory and cost of goods sold are priced at the weightedaverage cost of all items available',
40331:'for sale. whole life policies policies that provide insurance over the insured’s entire life and the proceeds face amount are',
40332:'paid only upon death of the insured. writeoff an action to remove an amount from an entity’s assets. awriteoff of',
40333:'a loan occurs when an agency official determines, after all appropriate collection tools have been used, that a debt is',
40334:'uncollectible. active collection on an account ceases, and the account is removed from an entity’s receivables. treasury financial manual supplement',
40335:'page 88 appendix e fasab handbook, version 20 06/21 appendix f: consolidated list ofabbreviations aalp assetacquisition lifecyclephases aapc accountingandauditingpolicycommittee aba',
40336:'americanbarassociation aga association ofgovernmentaccountants aean aggregate entry age normal afdc aid to families with dependent children aicpa americaninstituteofcertifiedpublicaccountants amc acquisition',
40337:'management costs anpv actuarial net present value apb accounting principles board apv actuarial present value arb accounting research bulletin asb',
40338:'auditing standards board asc accounting standards codification au auditing standards auc auditing standards clarified aup agreed upon procedures bfc basis',
40339:'for conclusions caas contractorassistanceandadvisoryservice cai costaccountingissues cae claim adjustment expense carc chemicalagentresistantcoating cbo congressional budget office ccc commodity credit corporation',
40340:'cefms corps of engineers financial management system cercla comprehensiveenvironmentalresponsecompensationandliabilityact of1980 cfc chlorofluorocarbon cfo chief financial officers cfoc chieffinancialofficers’ council cfoact',
40341:'chieffinancialofficersact cfr code of federal regulations cfs consolidated financial statements cfr consolidated financial report of the u.s. government cigie council',
40342:'of the inspectors general on integrity and efficiency cip construction in process coemis corps of engineers management information system cola',
40343:'cost of living adjustment cots commercial off the shelf cpa certified public accountant cpi consumer price index cre component reporting',
40344:'entity csrs civil service retirement system page 1 appendix f: list of abbreviations fasab handbook, version 20 06/21 appendix f:',
40345:'list of abbreviations crs congressional research service d&d decontamination and decommissioning dhs department of homeland security di disability insurance dis',
40346:'dateinservice dmai deferredmaintenanceandassetimpairmenttaskforce dm&r deferred maintenance and repairs doc department of commerce dod department of defense dol u.s. department of',
40347:'labor doj department of justice dot department of transportation dss defense security service ed exposure draft edp electronic data processing',
40348:'eo executive order epa environmentalprotectionagency esaa employmentsecurityadministrationaccount euca extendedunemploymentcompensationaccount eul enhanced use lease faa federalaviationadministration faq frequentlyaskedquestion far federalacquisitionregulation fasab',
40349:'federalaccountingstandardsadvisoryboard fasb financialaccountingstandards board fbwt fund balance with treasury fdic federal deposit insurance corporation feca federalemployees compensationaccount fed log federal',
40350:'logistics data fema federalemergencymanagementagency fers federal employees retirement plan ffc federal facilities council ffrdc federally funded research and development centers',
40351:'fifo firstin, firstout fmfia federalmanager’s financialintegrityact fr financial report of the u.s. government frpc federal real property council frpp federal',
40352:'real property profile frs federal reserve system ftca federaltortclaimsact fua federalunemploymentaccount futa federalunemploymenttaxact page 2 appendix f: list of abbreviations',
40353:'fasab handbook, version 20 06/21 appendix f: list of abbreviations fy fiscal year gaap generally accepted accounting principles gagas generallyacceptedgovernmentauditingstandards',
40354:'gao governmentaccountabilityoffice gasb governmentalaccountingstandards board gasbs governmentalaccountingstandards boardstatement gdp gross domestic product gis geographic information system gltdag generallongterm debtaccountgroup gpffr',
40355:'general purpose federal financial report gpfs generalpurpose financial statements gpra governmentperformanceandresultsact gpp&e general property, plant, and equipment grs general records',
40356:'schedule gsa generalservicesadministration gse government sponsored enterprises hhs department of health and human services hi hospital insurance medicare ibnr incurred',
40357:'but not reported ic intelligence community ig inspector general ipa independentpublicaccountant ipsas internationalpublic sectoraccountingstandards ipsasb internationalpublic sectoraccountingstandards board irr internal',
40358:'rate of return it information technology ius internal use software jfmip joint financial management improvement program kdp key decision point',
40359:'lac latest acquisition cost lcm lower of cost or market lifo lastin, firstout cost flow lp limited partnership ma medicareadvantage',
40360:'md&a management’s discussion & analysis m&r maintenance and repairs mri magnetic resonance imaging mrs military retirement system napa nationalacademyofpublicadministration nara',
40361:'nationalarchivesandrecordsadministration nas nationalairspacesystem nasa nationalaeronauticsandspaceadministration page 3 appendix f: list of abbreviations fasab handbook, version 20 06/21 appendix f: list',
40362:'of abbreviations ncgas nationalcouncil ongovernmentaccountingstatement nd national defense nfi nonfinancial information nipa national income and product accounts nist national institute',
40363:'of standards and technology nsn national stock number npr national performance review npv net present value nro national reconnaissance office',
40364:'o&m operation and maintenance oai other accompanying information oasdi oldage, survivors, and disability insurance oasi oldage and survivors insurance oca',
40365:'originalclassificationauthority ocs outer continental shelf odni office of the director of national intelligence oecd organisation for economic cooperation and development',
40366:'oig office of the inspector general omb office of management and budget om&s operating materials and supplies orb other retirement',
40367:'benefits orfni other reported financial and nonfinancial information opeb other postemployment benefits osha occupationalsafetyandhealthadministration p3 publicprivate partnership pb president’s budget',
40368:'pbgc pension benefit guaranty corporation pbs public buildings service pcb polychlorinated biphenyl perc perchloroethylene phys/airsp physicalairspace pp&e property, plant, and',
40369:'equipment ppp publicprivate partnership prp potentially responsible parties prv plant replacement value psa personalsecurityaccounts psc public sector comparato psf per',
40370:'square foot puc projected unit credit pv present value qa qualityassurance rcra resourceconservationandrecoveryact page 4 appendix f: list of abbreviations',
40371:'fasab handbook, version 20 06/21 appendix f: list of abbreviations re&d research, engineering & development rfi request for information rfp',
40372:'request for proposal ri/fs remedial investigation/feasibility study rrb railroad retirement board rsi required supplementary information rssi required supplementary stewardship information',
40373:'sas statementofauditingstandards sca serviceconcessionarrangement scnp statement of changes in net position scsia statementofchanges insocialinsuranceamounts sec securities exchange commission seta systems',
40374:'engineeringandtechnicalassistance sfas statements offinancialaccountingstandards sffac statements offederalfinancialaccountingconcepts sffas statements offederalfinancialaccountingstandards sgl standard general ledger sl stewardship land smi supplementary medical',
40375:'insurance medicare sna system ofnationalaccounts snc statement of net cost sop statement of position sosi statement of social insurance spv',
40376:'special purpose vehicle ssa socialsecurityadministration tb technical bulletin tctos time compliance and technical orders tr technical release tsca toxic substances',
40377:'controlact tsdf treatment storage disposal facility tssc technical support services contract ui unemployment insurance u.s. united states usace u.s. armycorpofengineers',
40378:'usbr united states bureau of reclamation usc united states code uscg u.s. coast guard utf unemployment trust fund va veteransaffairs',
40379:'vfm value for money page 5 appendix f: list of abbreviations fasab handbook, version 20 06/21',