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Susan Combs  •  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

General Accounting

Non-Exchange Transactions
Sample Accounting Treatment

Example 1: Community College Capital Program Without Time Requirements

A state (provider) offers money to community colleges (recipients) to be used solely for capital outlays. The amounts are based on student population. Amounts not used within three years must be returned to the state. This is a voluntary non-exchange transaction.

Two eligibility requirements must be met in order for a transaction to occur:

  1. Recipients must be community colleges.
  2. The applicable period must have begun (assumed to be the first day of the state’s fiscal year).

Additionally, the requirement to use the resources for capital outlays is a purpose restriction. Fund balance or equity is restricted until capital costs are incurred due to the purpose restriction. (Purpose restrictions do not affect timing of revenue recognition.)

Accounting Treatment: Full Accrual

Debit Credit
Cash or Accts Receivable 3,000  
Capital Grants Revenue   3,000

Example 1a: Community College Capital Program With Time Requirements – Funds Received

Requirements are the same as the previous example, except the resources must be spread evenly over the three-year period. (Time requirements do affect revenue recognition.) One-third of the revenue is recognized each year.

Debit Credit
Cash 3,000  
Capital Grants Revenue   1,000
Deferred Capital Grants Revenue   2,000

Example 1b: State Cancels Grant After First Year – Advanced Funds are Returned to the State

Debit Credit
Deferred Capital Grants Revenue 2,000  
Cash   2,000

Accounting for Uncollectable Acccounts (APS 027) (FPP C.001) provides accounting guidance and entries for disposition of uncollectable loans or other debts owed to state agencies.

Texas Government Code, Section 403.031(c), provides further clarification on reclassifying receivables as uncollectable. Texas Government code, Section 2107.004, provides guidance regarding when an obligation shall be reported to the Office of The Attorney General (OAG) for further collection efforts.

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Susan Combs
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.state.tx.us
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