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Glenn Hegar•Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Capital Assets

Sale, Disposal or Interagency transfer of Capital Assets
Recording Sale of Capital Assets

Run the CAAB 105 SPA report to show the amount of disposals for an agency. This report contains disposals of property to parties external to the state. It includes all “hard” disposal methods, other than interagency transfers, completed CIP and assets added in error. This report is sorted by:

  • GAAP fund group
  • Depreciable code
  • AFR category
  • GAAP fund type
  • GAAP fund
  • AFR fund
  • SPA agency fund
  • Property number
  • Component number
  • Depreciable entity FY

Subtotals are at the GAAP fund group, depreciable code and AFR category levels.

The amount for the sale of capital assets must match the amount in sale of capital assets reported in governmental fund types. When the entry is made, the balance between the governmental fund types and fund type 11 must net to zero.

Verify that capital outlay activity in governmental funds and basis conversion funds net to zero at the GAAP source/object level using the DR206 — Review Govt-Wide Basis Conversion report located in the FMQuery–SIRS AFR Desk Review menu.

The deletions column in Note 2 must match the net of proceeds from the sale of capital assets and any gain or loss on the sale of capital assets.

Example of Gain on Sale of Asset Example of Loss on Sale of Asset
       
Historical Cost 10,000   Historical Cost 10,000  
Less Accumulated Depreciation (7,000)   Less Accumulated Depreciation (7,000)  
Net Book Value   3,000   Net Book Value   3,000  
Less Proceeds from Sale (5,000)   Less Proceeds from Sale (2,000)  
Gain on Sale   2,000   Loss on Sale   1,000  
Treatment of Gain on Sale of Asset Treatment of Loss on Sale of Asset
       
Accumulated Depreciation 7,000   Accumulated Depreciation 7,000  
Proceeds from Sale 5,000   Proceeds from Sale 2,000  
Gain on Sale       2,000 Loss on Sale 1,000  
Capital Asset       10,000 Capital Asset       10,000

Proprietary and Fiduciary Funds

Recording Capital Asset Balances

Proprietary and fiduciary funds (pension trust and private-purpose trust) report capital assets using full accrual accounting.

Business-Type Activities

  • Use T-code 631 if there is a gain on the sale of assets.
  • Use T-code 631R if there is a loss on the sale of assets.
  • The GL account number used corresponds to the asset (and related depreciation) that is sold.
  • COBJs that can be used for these entries:
    • 3349 Sale of Land
    • 3750 Sale of Furniture and Equipment
    • 3751 Sale of Buildings
    • 3834 Gain/Loss on Sale of Capital Assets
    • 3839 Sale of Vehicles, Boats and Aircraft
    • 3841 Sale of Other Capital Assets
Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Fund Input GL
To Reverse Cash Revenue Recorded for Sale of Asset
(1) 5 U 0832CY XXX 631 CY 99999 XXXX $ XX.XX R XXXX 9999
To Reverse the Depreciation Associated with Asset Sold
(2) 5 U 0832CY XXX 644 CY 99999 N/A $ XX.XX   XXXX XXXX
To Reverse the Historical Cost of the Asset
(3) 5 U 0832CY XXX 645 CY 99999 N/A $ XX.XX   XXXX XXXX
To Record the Gain
(4) 5 U 0832CY XXX 631 CY 99999 3834 $ XX.XX   XXXX 9999
–OR–
To Record the Loss
(4) 5 U 0832CY XXX 631 CY 99999 3834 $ XX.XX R XXXX 9999

Accounting effect of above entries:

Debit Credit
*This entry assumes that the original sale was recorded to cash revenue.
(1) To Reverse Cash Revenue Recorded for Sale of Asset    
  5100* GAAP Revenue Offset $ XX.XX  
  9999 System Clearing   $ XX.XX
(2) To Reverse the Depreciation Associated with Asset Sold    
  XXXX General Ledger Account for Asset Depreciation $ XX.XX  
  9999 System Clearing   $ XX.XX
(3) To Reverse the Historical Cost of the Asset    
  9999 System Clearing $ XX.XX  
  XXXX General Ledger Account for Asset   $ XX.XX
(4) To Record the Gain    
  9999 System Clearing $ XX.XX  
  5100 GAAP Revenue Offset   $ XX.XX
–OR–
(4) To Record the Loss    
  5100 GAAP Revenue Offset $ XX.XX  
  9999 System Clearing   $ XX.XX

Governmental Funds

Modified to Full Accrual Adjustments for Capital Assets

Capital Asset Adjustment (Fund Type 11)

Capital asset adjustment fund type is used to convert governmental fund types from modified accrual to full accrual. The basis conversion entries for capital assets are entered in USAS to the agency fund in this fund type.

For templates that can assist with the preparation of the capital asset adjustment (FT 11) basis conversion entries, see Working Papers.

Sale of Capital Assets

To record the sale of furniture and equipment in governmental funds, use T-code 191 with the following COBJs:

  • 3349 Sale of Land
  • 3750 Sale of Furniture and Equipment
  • 3751 Sale of Buildings
  • 3834 Gain/Loss on Capital Assets
  • 3839 Sale of Vehicles, Boats and Aircraft
  • 3841 Sale of Other Capital Assets

T-code 191 records the accounting events as other financing sources (uses) rather than revenue on the statement of revenues, expenditures and changes in fund balances. Sale of capital assets is a separate line item reported under other financing sources (uses). Since the proceeds from the sale of a capital asset are typically appropriated, record the entries to adjust budget with T-codes 006 and 009 when your agency receives the money.

Attention: Corrections for fiscal 20CY using T-code 191 must be made before Aug. 31. Corrections after Aug. 31 can be made with generic T-codes.

Corrections Before Aug. 31, 20CY

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Appn No Fund Input GL
* First entry should be reversing the original T-code (195, 179, etc.).
To Reverse Incorrect Deposit (if T-code 179 or 195 were used originally) Before Aug. 31, 20CY
(1) 2 J Current Date XXX XXX* XX 99999 3750 or 3751 $ XX.XX R XXXXX XXXX N/A
To Record Other Sources for Sale of Capital Asset Before Aug. 31, 20CY
(2) 2 J Current Date XXX 191 XX 99999 3750 or 3751 $ XX.XX   XXXXX XXXX N/A

Accounting effect of above entries:

Debit Credit
(1) To Reverse Incorrect Deposit (if T-code 179 or 195 were used originally)    
  5000 Revenue Control – Cash $ XX.XX  
  0045 Cash in State Treasury   $ XX.XX
  9060 Appropriation Control $ XX.XX  
  9055 Budgetary Fund Balance   $ XX.XX
(2) To Record Other Sources for Sale of Capital Asset    
  0045 Cash in State Treasury $ XX.XX  
  5000 Revenue Control – Cash   $ XX.XX
  5100 GAAP Revenue Offset $ XX.XX  
  6035 Other Financing Sources   $ XX.XX

Corrections After Aug. 31, 20CY

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Appn No Fund Input GL
To Reverse Incorrect Revenue After Aug. 31, 20CY
(1) 5 U 0832CY XXX 630 XX 99999 3750 $ XX.XX   N/A XXXX 9999
To Record Other Sources for Sale of Capital Asset
(2) 5 U 0832CY XXX 657 XX 99999 3750 $ XX.XX   N/A XXXX 9999

Accounting effect of above entries:

Debit Credit
(1) To Reverse Incorrect Revenue    
  5100 GAAP Revenue Offset $ XX.XX  
  9999 System Clearing   $ XX.XX
(2) To Record Other Sources for Sale of Capital Asset    
  9999 System Clearing $ XX.XX  
  6035 Other Financing Sources   $ XX.XX

WARNING: System clearing must not have a balance after all transactions are entered.

Governmental Activities – Basis Conversion (Fund Type 11)

  • Use T-code 516R if there is a gain on the sale of assets.
  • Use T-code 516 if there is a loss on the sale of assets.
  • The GL account number used corresponds to the asset (and related depreciation) that is sold.
  • COBJs that can be used for these entries:
    • 3349 Sale of Land
    • 3750 Sale of Furniture and Equipment
    • 3751 Sale of Buildings
    • 3834 Gain/Loss on Sale of Capital Assets
    • 3839 Sale of Vehicles, Boats and Aircraft
    • 3841 Sale of Other Capital Assets
Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Fund Input GL
To Reverse Cash Revenue for Sale of the Asset
(1) 5 U 0832CY XXX 516 CY 99999 XXX $ XX.XX   XXXX 9992
To Reverse the Depreciation Associated with Asset Sold
(2) 5 U 0832CY XXX 534 CY 99999 N/A $ XX.XX   XXXX XXXX
To Reverse the Historical Cost of the Asset
(3) 5 U 0832CY XXX 535 CY 99999 N/A $ XX.XX   XXXX XXXX
To Record the Gain
(4) 5 U 0832CY XXX 516 CY 99999 3834 $ XX.XX R XXXX 9992
–OR–
To Record the Loss
(4) 5 U 0832CY XXX 516 CY 99999 3834 $ XX.XX   XXXX 9992

Accounting effect of above entries:

Debit Credit
*This entry assumes that the original sale was recorded to cash revenue.
(1) To Reverse Cash Revenue for Sale of the Asset    
  6135* BC Other Financing Sources $ XX.XX  
  9992 BC System Clearing   $ XX.XX
(2) To Reverse the Depreciation Associated with Asset Sold    
  XXXX General Ledger Account for Asset Depreciation $ XX.XX  
  9992 BC System Clearing   $ XX.XX
(3) To Reverse the Historical Cost of the Asset    
  9992 BC System Clearing $ XX.XX  
  XXXX General Ledger Account for Asset   $ XX.XX
(4) To Record the Gain    
  9992 BC System Clearing $ XX.XX  
  6135 BC Other Financing Sources   $ XX.XX
–OR–
(4) To Record the Loss    
  6135 BC Other Financing Sources $ XX.XX  
  9992 BC System Clearing   $ XX.XX
Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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