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entitled 'GAO/PCIE: Financial Audit Manual: Checklist for Federal 
Accounting Reporting, and Disclosures' which was released on July 01, 
2004.

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July 2004:

Dear Colleague:

The U.S. Government Accountability Office (GAO) and the President's 
Council on Integrity and Efficiency (PCIE) maintain the GAO/PCIE 
Financial Audit Manual (FAM). The FAM provides guidance for performing 
financial statement audits of federal entities. It is a key tool for 
enhancing accountability over taxpayer-provided resources.

GAO and PCIE are committed to keeping the FAM current. With this goal 
in mind, in October of 2003, we revised the Checklist for Reports 
Prepared Under the CFO Act (CFO Checklist), and requested comments on 
an exposure draft of the checklist. One of the key changes in the final 
checklist is its title, which has been changed to Checklist for Federal 
Accounting, Reporting, and Disclosures. This change was made to reflect 
the checklist's potential application to any federal entity preparing 
annual audited financial statements in accordance with the Office of 
Management and Budget's (OMB) form and content guidance.

This checklist is located in section 1050 of the GAO/PCIE FAM. It can 
be accessed at either the GAO Web site [Hyperlink, http://www.gao.gov] 
or the PCIE Web site 
[Hyperlink, http://www.ignet.gov/pande/audit1.html#guide]. We extend 
our thanks to the individuals and organizations that provided comments 
to make this checklist more effective.

Signed by:

Jeffrey C. Steinhoff:

Managing Director:
Financial Management and Assurance:
U.S. Government Accountability Office:

Signed by:

The Honorable Everett L. Mosley:
Chair:
President's Council on Integrity and Efficiency Audit Committee:

Attachment:

GAO/PCIE:

FINANCIAL AUDIT MANUAL:

Checklist for Federal Accounting, Reporting, and Disclosures:

Reporting 1050--Checklist for Federal Accounting, Reporting, and 
Disclosures:

Contents:

Abbreviations:

Sections:

I. Overview:

II. General Items related to the Financial Statements:

III. Balance Sheet:

IV. Statement of Net Cost:

V. Statement of Changes in Net Position:

VI. Statement of Budgetary Resources:

VII. Statement of Financing:

VIII. Statement of Custodial Activity:

IX. Notes to Financial Statements:

X. Supplementary Information:

XI. Social Insurance:

Abbreviations:

AcSEC: Accounting Standards Executive Committee:

AICPA: American Institute of Certified Public Accountants:

CFO Act: Chief Financial Officers Act of 1990:

COTS: commercial off-the-shelf:

CSRS: Civil Service Retirement System:

FASAB: Federal Accounting Standards Advisory Board:

FASB: Financial Accounting Standards Board:

FDIC: Federal Deposit Insurance Corporation:

FERS: Federal Employees Retirement System:

FFMIA: Federal Financial Management Improvement Act of 1996:

FHA: Federal Housing Administration:

FIFO: first-in, first-out:

FY: fiscal year:

GAAP: Generally Accepted Accounting Principles:

GDP: gross domestic product:

GMRA: Government Management Reform Act of 1994:

GPRA: Government Performance and Results Act of 1993:

HI: Hospital Insurance (Medicare Part A):

IMF: International Monetary Fund:

Imple. Guide: Implementation Guide:

IRS: Internal Revenue Service:

LIFO: last-in, first-out:

MD&A: Management's Discussion and Analysis:

MRS: Military Retirement System:

NRV: net realizable value:

OASDI: Old Age, Survivors, and Disability Insurance (Social Security):

OMB: Office of Management and Budget:

OPEB: Other Postemployment Benefits:

ORB: Other Retirement Benefits:

PP&E: Property, Plant, and Equipment:

RRB: Railroad Retirement Benefits:

RSI: Required Supplementary Information:

RSSI: Required Supplementary Stewardship Information:

SFAS: Statement of Financial Accounting Standards:

SFFAC Statements of Federal Financial Accounting Concepts:

SFFAS Statements of Federal Financial Accounting Standards:

SGL: U.S. Government Standard General Ledger:

SMI: Supplementary Medical Insurance (Medicare Part B):

SOP: Statement of Position:

TVA: Tennessee Valley Authority:

UI: unemployment insurance:

UTF: Unemployment Trust Fund:

Section I: Overview:

Introduction:

The Chief Financial Officers (CFO) Act of 1990 and the Government 
Management Reform Act of 1994 require, among other mandates, that 
agencies' chief financial officers submit annual reports to their 
agency heads and to the Office of Management and Budget (OMB). These 
annual reports are to contain audited financial statements of their 
agencies. The financial statements are to be presented in conformity 
with generally accepted accounting principles (GAAP). [Footnote 1] The 
title of this checklist has been changed to Checklist for Federal 
Accounting, Reporting, and Disclosures. Previously referred to as the 
CFO Act Checklist, the change was made to reflect its potential 
application to any federal entity preparing annual audited financial 
statements in accordance with OMB's proposed form and content 
guidelines.

This checklist is being issued to assist agencies in preparing these 
statements and auditors in auditing them. Use of this checklist is not 
a requirement. Rather, it is intended to help provide for a systematic, 
organized, and structured approach to preparing or reviewing agency 
financial statements. Furthermore, it should be noted that, while the 
questions contained in the checklist are taken from authoritative 
sources, the checklist itself is not authoritative, nor is it a 
comprehensive guide. Preparers and auditors should also consult 
financial management regulations for the individual agencies, as the 
regulations may have specific guidance when the standards allow 
alternatives or management flexibility.

Checklist Organization:

The checklist has 11 sections: an overview section, a section related 
to general items in the financial statements, a section for each of the 
six financial statements, and three additional sections. The six 
sections reflecting the financial statements are organized by the line 
items in financial statements to allow the user to proceed through each 
statement from the beginning to the end. The final three sections cover 
(1) disclosures in the notes to the financial statements related to 
significant accounting policies, (2) required supplementary 
stewardship information and required supplementary information, and (3) 
social insurance.

Since the financial statements are interrelated, some questions 
concerning line items in one financial statement may also pertain to 
line items in another statement. For example, the questions covering 
loans receivable in the balance sheet section may also deal with 
matters related to interest income and subsidy expense appearing in the 
statements of financing and net cost sections. Because of these 
relationships, our general organizational approach aggregates related 
information so that questions on related line items appearing in more 
than one financial statement are covered only in the first financial 
statement section in which the line item appears. For example, 
questions concerning interest income and subsidy expense would appear 
only in the balance sheet section. Similarly, questions related to the 
notes to the financial statements section would also appear only under 
the line item of the initial financial statement.

Except for sections I, II, VI, IX, and XI, the first page of each 
section contains a list showing the number of questions in the section. 
This checklist has 785 questions as follows.

General Items Related to the Financial Statements: 23;

Balance Sheet: 355;

Statement of Net Cost: 180;

Statement of Changes in Net Position: 39;

Statement of Budgetary Resources: 27;

Statement of Financing: 27;

Statement of Custodial Activity: 27;

Notes to Financial Statements (Significant Accounting Policies): 5;

Supplementary Information: 78;

Social Insurance: 24;

Authoritative Guidance:

Each question in this guide is referenced to a source. The sources 
cited are (1) the Statements of Federal Financial Accounting Standards 
(SFFAS) and (2) OMB Bulletin 01-09, Form and Content of Agency 
Financial Statements.

FASAB statements include Statements of Federal Financial Accounting 
Concepts (SFFAC) and Statements of Federal Financial Accounting 
Standards (SFFAS). The three approved accounting concept statements are 
#1 Objectives of Federal Financial Reporting, 1993, #2 Entity and 
Display, 1995, and #3 Management's Discussion and Analysis, 1999. The 
24 SFFAS standards [Footnote 2] covered in this checklist are:

1. Accounting for Selected Assets and Liabilities, 1993.

2. Accounting for Direct Loans and Loan Guarantees, 1993.

3. Accounting for Inventory and Related Property, 1993.

4. Managerial Cost Accounting Concepts and Standards, 1995.

5. Accounting for Liabilities of the Federal Government, 1995.

6. Accounting for Property, Plant, and Equipment, 1995.

7. Accounting for Revenue and Other Financing Sources, 1996.

8. Supplementary Stewardship Reporting, 1996.

9. Deferral of the Effective Date of Managerial Cost Accounting 
Standards for the Federal Government in SFFAS No. 4, 1997.

10. Accounting for Internal Use Software, 1998.

11. Amendments to Accounting for Property, Plant, and Equipment - 
Definitional Changes, 1998. [Footnote 3]

12. Recognition of Contingent Liabilities Arising from Litigation, 
1998.

13. Deferral of Paragraph 65.2 - Material Revenue-Related Transactions 
Disclosures, 1999.

14. Amendments to Deferred Maintenance Reporting, 1999.

15. Management's Discussion and Analysis, 1999.

16. Amendments to Accounting for Property, Plant, and Equipment - 
Measurement and Reporting for Multi-Use Heritage Assets, 1999.

17. Accounting for Social Insurance, 1999.

18. Amendments to Accounting Standards For Direct Loans and Loans 
Guarantees, 2000.

19. Technical Amendments to Accounting Standards for Direct Loans and 
Loan Guarantees, 2001.

20. Elimination of Certain Disclosures Related to Tax Revenue 
Transactions by the Internal Revenue Service, Customs and Others, 2001.

21. Reporting Corrections of Errors and Changes in Accounting 
Principles, 2001.

22. Change in Certain Requirements for Reconciling Obligations and Net 
Cost of Operations, 2001.

23. Eliminating the Category National Defense Property, Plant, and 
Equipment, 2003.

25. Reclassification of Stewardship Responsibilities and Eliminating 
the Current Services Assessment, 2003. [Footnote 4]

SFFAC 4, Intended Audience and Qualitative Characteristic for the 
Consolidated Financial Report of the United States Government, and 
SFFAS 24, Selected Standards for the Consolidated Financial Report of 
the United States Government, are not covered in this checklist, as 
this checklist is intended for use at the agency reporting level, and 
is not to be used for the financial report of the U.S. government.

SFFAS 7 Implementation Guide to Accounting for Revenue and Other 
Financing Sources, 1996, is also covered in this checklist. OMB 
Bulletin 01-09 provides the detailed requirements for the form and 
content of agency financial statements.

How to Use This Guide:

To the right of each question are two columns. The first column 
provides for a "yes," "no," or "N/A" (not applicable) answer to each 
question. The second column provides for an explanation of the answer 
to each question. A "yes" answer should indicate that the financial 
statements contain the information asked by the question. For each 
"yes" answer, the explanation column should include the page number or 
location in the financial statements where the information can be 
found. Also, any other information pertinent to the question and the 
response should be provided in the explanation column.

An "N/A" answer might indicate that the question does not apply to the 
federal entity. For example, most federal agencies do not administer 
loan, loan guarantee, or loan insurance programs and, therefore, do not 
have credit program receivables and related property. Consequently, the 
questions on these receivables, property, and subsidies would not 
apply. A simple explanation indicating that the reporting entity does 
not administer loan programs would appear in the explanation column of 
the first question in the series.

A "no" answer indicates that the information asked for in the question 
is not included in the financial statements, notes, or supplementary 
information, respectively. The explanation column should describe in 
sufficient detail why the information is not included.

[End of section]

Section II: General Items Related to the Financial Statements:

There are 23 questions in this section. All the questions relate to the 
overall financial statements and are not further divided into 
categories.

General Items (1 - 23):

1. Does the entity's annual financial statement consist of the 
following items?

a. management's discussion and analysis (MD&A) of the reporting entity;

b. basic statements and related notes;

c. required supplementary stewardship information (RSSI)?

d. required supplementary information (RSI)?

e. other accompanying information (OAI) that provides users of the 
financial statements with a better understanding of the entity's 
programs and the extent to which program objectives are achieved (OMB 
Bulletin 01-09, p. 4, section 1.5);

2. Do the basic statements include?

a. Balance Sheet;

b. Statement of Net Cost;

c. Statement of Changes in Net Position; d. Statement of Budgetary 
Resources;

e. Statement of Financing;

f. Statement of Custodial Activity (OMB Bulletin 01-09, pp. 4 & 5, 
section 1.5);

3. Does the entity use the following hierarchy as its sources of 
guidance in preparing its financial statements?

a. FASAB Statements and Interpretations as well as American Institute 
of Certified Public Accountants (AICPA) and Financial Accounting 
Standards Board (FASB) pronouncements if made applicable to federal 
government entities by a FASAB Statement or Interpretation;

b. FASAB technical bulletins and, if specifically made applicable to 
federal government entities by AICPS and cleared by FASAB, AICPA 
Industry Audit and Accounting Guides and AICPA Statements of Position;

c. AICPA Accounting Standards Executive Committee (AcSEC) Practice 
Bulletins if specifically made applicable to federal government 
entities and cleared by FASAB, as well as Technical Releases of the 
Accounting and Auditing Policy Committee of FASAB;

d. Implementation guides published by FASAB staff and practices that 
are widely recognized and prevalent in the federal government;

e. In the absence of a pronouncement covered by federal Generally 
Accepted Accounting Principles (GAAP) or another source of established 
principles, other accounting literature, depending on its relevance in 
the circumstances.[Footnote 1] (OMB Bulletin 01-09, p. 2, section 1.2 & 
p. 13, section 2.1, item B);

4. Does the entity present comparative information and related footnote 
disclosures for the current year and prior year for the six basic 
financial statements, and MD&A? (OMB Bulletin 01-09, p. 5, section 1.6 
& p. 13, section 2.1, item F);

5. Does the entity present comparative information in the RSSI and RSI 
when the information would be meaningful to the user of the financial 
report? (OMB Bulletin 01-09, p. 5, section 1.6);

6. Do the quarterly interim statements include full accruals and are 
intra-entity transactions eliminated? (OMB Bulletin 01-09, p. 14, 
section 2.1, item G);

7. Are these interim statements prepared on a comparative 
basis?[Footnote 2] (OMB Bulletin 01-09, p. 14, section 2.1, item G);

8. To the extent that information is not available on a quarterly 
basis, has the entity developed reliable, alternative means of 
estimating quarterly amounts and balances? (OMB Bulletin 01-09, p. 14, 
section 2.1, item G);

9. When an entity presents disaggregated information for component 
organizations, does the total column for the entity as a whole reflect 
consolidated totals net of intra-entity transactions, except for the 
Statement of Budgetary Resources, which is presented on a combined 
basis? (OMB Bulletin 01-09, p. 14, section 2.1, item H):

When a reporting entity presents its financial statements in a single 
column format, the statements are referred to as consolidated 
statements. With the exception of the Statement of Budgetary Resources, 
financial statements that use a multicolumn format to present 
information on an entity's major components or lines of business as 
well as the consolidated amounts are referred to as consolidating 
statements. (OMB Bulletin 01-09, p. 14, section 2.1, item H);

10. Are intra-entity transactions needed to arrive at the consolidated 
amounts presented in a column on the face of the consolidating 
statements? (OMB Bulletin 01-09, p. 14, item H);

11. Has the entity provided assurance of the following?

a. information in the financial statements is presented in accordance 
with federal GAAP;

b. the underlying records fully support the information (OMB Bulletin 
01-09, p. 14, section 2.1, item J);

12. Does the reporting entity include franchise funds and other 
intragovernmental support revolving funds among the activities covered 
by its financial statements? (OMB Bulletin 01-09, p. 15, section 2.1, 
item K & p. 113, section 11.6);

13. If information about the assets, liabilities, costs, and revenues 
of these franchise funds and intragovernmental support revolving funds 
are not separately reported on the entity's basic financial statements, 
then is condensed information reported as required supplemental 
information in accordance with the applicable SFFAS and required 
segment information? (OMB Bulletin 01-09, p. 15, section 2.1, item K & 
p. 113, section 11.6);

14. Does the entity report its assets, liabilities, and net position by 
the lines displayed in the illustrative Balance Sheet and Statement of 
Changes in Net Position in OMB Bulletin 01-09? (OMB Bulletin 01-09, 
p.15, section 2.1, item L);

15. If the entity aggregates such illustrated line items in reporting 
at the departmental level, is the composition of the aggregated line 
items disclosed? (OMB Bulletin 01-09, p.15, section 2.1, item L);

16. Conversely, if the entity disaggregates such line items in its 
departmental statements, does the entity report or disclose the total 
of the disaggregated line items? (OMB Bulletin 01-09, p.15, section 
2.1, item L);

17. Are line items, which are immaterial but related in nature, 
combined? (OMB Bulletin 01-09, p. 15, section 2.1, item M);

18. Are discrete balances of an immaterial amount designated as 
"other?" (OMB Bulletin 01-09, p. 15, section 2.1, item M);

19. If not, are these material balances separately reported and 
designated by name? (OMB Bulletin 01-09, p. 15, section 2.1, items M & 
N);

20. Are the statement line items, footnotes, and lines or columns in 
footnotes that do not apply or are not informative for the reporting 
entity excluded? (OMB Bulletin 01-09, p. 15, section 2.1, item O);

21. Do schedule totals presented in the footnotes, in support of 
amounts presented in financial statements, agree with the amounts 
presented in the body of the financial statements? (OMB Bulletin 01-09, 
p. 15, section 2.1, item P);

22. When presenting dollar amounts in the statements and the notes, 
does the entity do the following?

a. round dollar amounts to the nearest whole dollar, thousand, or 
million based upon informative value to the reporting entity;

b. maintain the chosen rounding level throughout the financial 
statements and footnotes;

c. ensure that individual line items add up to the totals by adjusting 
the line items for the differences created by the rounding process 
rather than adjusting column totals (OMB Bulletin 01-09, p. 16, section 
2.1, item Q);

23. Are footnotes sequentially numbered? (OMB Bulletin 01-09, p. 16, 
section 2.1, item S);

The Balance Sheet presents, as of a specific time, amounts of future 
economic benefits owned or managed by the reporting entity exclusive of 
items subject to stewardship reporting (assets), amounts owed by the 
entity (liabilities), and amounts that comprise the difference (net 
position). (SFFAC 2, par. 57; OMB Bulletin 01-09, p. 17, section 3.1);

[End of section]

Section III: Balance Sheet:

The questions related to the balance sheet are contained under 23 line 
items. The question numbers related to each line item follow.

Assets:

General items:

1. Fund Balance with Treasury; Question numbers: 7 - 22;

2. Investments; Question numbers: 23 - 32;

3. Accounts Receivable (Net); Question numbers: 33 - 49;

4. Interest Receivable (Net); Question numbers: 50 - 54;

5. Credit Program Receivables; Question numbers: 55 - 96;

6. Cash and Other Monetary Assets; Question numbers: 97 - 102;

7. Inventory and Related Property; Question numbers: 103 - 125;

8. Operating Materials and Supplies; Question numbers: 126 - 137;

9. Stockpile Materials; Question numbers: 138 - 150;

10. Seized Property; Question numbers: 151 - 158;

11. Forfeited Property; Question numbers: 159 - 172;

12. Goods Held Under Price Support and Stabilization Programs; Question 
numbers: 173 - 186;

13. General Property, Plant, and Equipment (Net); Question numbers: 187 
- 233;

14. Software; Question numbers: 234 - 262;

15. Other Assets; Question numbers: 263 - 268;

Liabilities:

16. Liabilities in General; Question numbers: 269 - 272;

17. Accounts Payable and Interest Payable; Question numbers: 273 - 280;

18. Liabilities for Loan Guarantees; Question numbers: 281 - 294;

19. Lease Liabilities; Question numbers: 295 - 300;

20. Federal Debt and Related Interest; Question numbers: 301 - 311;

21. Pensions, Other Retirement Benefits, and Postemployment Benefits; 
Question numbers: 312 - 319;

22. Other Liabilities; Question numbers: 320 - 353;

Net Position:

23. Unexpended Appropriations and Cumulative Results of Operations; 
Question numbers: 354 - 355;

General Items (1-6):

1. Are entity and nonentity assets combined on the face of the balance 
sheet?[Footnote 3] (OMB Bulletin 01-09, p. 17, section 3.1 and p. 19, 
section 3.3);

2. Are the amounts and types of nonentity assets disclosed in a note to 
the financial statements? OMB Bulletin 01-09, p. 17, section 3.1; p. 
19, section 3.3; p. 56, section 9.2)?

Liabilities covered by budgetary resources are liabilities covered by 
realized budgetary resources as of the balance sheet date. Budgetary 
resources encompass not only new budget authority but also other 
resources available to cover liabilities for specified purposes in a 
given year. Available budgetary resources include (1) new budget 
authority, (2) unobligated balances of budgetary resources at the 
beginning of the year or net transfers of prior year balances during 
the year, (3) spending authority from offsetting collections (credited 
to an appropriation or fund account), and (4) recoveries of unexpired 
budget authority through downward adjustments of prior year 
obligations. Liabilities are considered covered by budgetary resources 
if they are to be funded by permanent indefinite appropriations or 
borrowing authority, which have been enacted and signed into law as of 
the balance sheet date, provided that the resources may be apportioned 
by OMB without further action by the Congress and without a contingency 
having to be met first. (OMB Bulletin 01-09, p. 24, section 3.4);

3. Are liabilities covered by budgetary resources and liabilities not 
covered by budgetary resources combined on the face of the balance 
sheet? (OMB Bulletin 01-09, p. 17, section 3.1, p. 24, section 3.4);

4. Are liabilities not covered by budgetary resources disclosed in a 
note to the financial statements? (OMB Bulletin 01-09, p. 17, section 
3.1 & pp. 78 & 79, section 9.12);

5. Does the Balance Sheet display assets, liabilities, and net 
position? (OMB Bulletin 01-09, p. 18, section 3.2)?

Intragovernmental assets arise from transactions among federal 
entities. Intragovernmental assets represent claims of a federal entity 
against other federal entities. Intragovernmental liabilities are 
claims against the reporting entity by other federal entities. (OMB 
Bulletin 01-09, p. 19, section 3.3; p. 24, section 3.4);

6. Are intragovernmental assets and liabilities reported separately 
from transactions with non-federal entities, including the Federal 
Reserve and government sponsored enterprises?[Footnote 4] (OMB Bulletin 
01-09, p. 19, section 3.3 & p. 24, section 3.4);

Assets; Fund Balance with Treasury (7 - 22):

A federal entity's fund balance with the Treasury is the aggregate 
amount of funds in the entity's accounts with Treasury for which the 
entity is authorized to make expenditures and pay liabilities. Fund 
balance with Treasury includes clearing account balances and the dollar 
equivalent of foreign currency account balances. From the reporting 
entity's perspective, a fund balance with Treasury is an asset. From 
the perspective of the federal government as a whole, the fund balance 
is neither an asset nor a liability; it instead represents a commitment 
to make resources available to federal departments, agencies, programs, 
and other entities. (SFFAS 1, par. 31 & 32);

7. Is the fund balance with Treasury reported as an intragovernmental 
asset? (SFFAS 1, par. 31; OMB Bulletin 01-09, p. 18, section 3.2);

8. Are amounts disclosed as fund balances in deposit, suspense, and 
clearing accounts that are not available to finance entity activities 
reported as nonentity assets? (OMB Bulletin 01-09, p. 19, section 3.3);

9. Are foreign currency account balances reported on the balance sheet 
translated into U.S. dollars at exchange rates determined by the 
Treasury and effective at the financial reporting date? (SFFAS 1, par. 
32; OMB Bulletin 01-09, p. 19, section 3.3);

10. Does the entity's fund balance with Treasury also include the 
following?

a. clearing account balances;

b. balances for direct loan and loan guarantee activities held in the 
credit reform program, financing, and liquidating accounts;

c. funds actually borrowed from Treasury under statutory authority;

d. the dollar equivalent of foreign currency account balances (SFFAS 1, 
par. 32 & 35);

11. Does the entity's fund balance with Treasury exclude contract 
authority[Footnote 5] or unused authority to borrow? (SFFAS 1, par. 
34);

12. Does the entity record an increase in its fund balance with 
Treasury when it does at least one of the following?

a. receives appropriations, reappropriations, continuing resolutions, 
appropriation restorations, and allocations;

b. receives transfers and reimbursements from other agencies;

c. borrows from the Treasury, Federal Financing Bank, or other 
entities;

d. collects and credits amounts to its appropriations or fund accounts 
that the entity is authorized to spend or use to offset its 
expenditures (SFFAS 1, par. 33);

13. Does the entity record a decrease in its fund balance with Treasury 
when each of the following occurs?

a. disbursements are made to pay liabilities or to purchase assets, 
goods, and services;

b. investments are made in U.S. securities;

c. expired appropriations are canceled;

d. transfers and reimbursements are made to other entities or to the 
Treasury;

e. appropriations are sequestered or rescinded (SFFAS 1, par. 36);

14. Does the entity distinguish funds within fund balance with Treasury 
as the obligated balance not yet disbursed[Footnote 6] and the 
unobligated balance[Footnote 7] in a note to the financial statements? 
(SFFAS 1, par. 37; OMB Bulletin 01-09, p. 57, section 9.3, item B);

15. Are fund balances that agencies were authorized to use disclosed by 
fund type (e.g., trust funds, revolving funds, appropriated funds, 
other fund types)? (OMB Bulletin 01-09, pp. 56 & 57, section 9.3, item 
A);

16. Are any restrictions on unobligated balances related to future use 
disclosed? (SFFAS 1, par. 38; OMB Bulletin 01-09, p. 57, section 9.3, 
item B);

17. Does the entity explain any discrepancies between fund balance with 
Treasury in its general ledger accounts and the balance in the 
Treasury's accounts and explain the causes of the discrepancies in 
footnotes to the financial statements?[Footnote 8] (SFFAS 1, par. 39; 
OMB Bulletin 01-09, p. 57, section 9.3, item C);

18. Does the entity disclose any other information necessary for 
understanding the nature of the fund balances, including information on 
unused funds in expired appropriations that are returned to Treasury at 
the end of a fiscal year? (SFFAS 1, par. 39; OMB Bulletin 01-09, p. 57, 
section 9.3, item C);

19. Are balances in deposit accounts, such as collections pending 
litigation or funds being held by the entity in the capacity of a 
banker or agent for others, disclosed under "other fund types?" (OMB 
Bulletin 01-09, p. 57, section 9.3, item A);

20. If, however, any of the balances under "other fund types" are 
material, are they listed separately? (OMB Bulletin 01-09, p. 57, 
section 9.3, item A);

21. Is other information necessary for understanding the nature of the 
fund balances with Treasury disclosed? (OMB Bulletin 01-09, p.57, 
section 9.3, item C);

22. Are unexpended appropriations recognized as capital and included 
under funds with Treasury when they are made available for 
apportionment? (SFFAS 7, par. 71);

Assets; Investments (23 - 32):

Investments in federal (i.e., treasury) securities include (1) 
nonmarketable par value Treasury securities, (2) market-based Treasury 
securities expected to be held to maturity, (3) marketable Treasury 
securities expected to be held to maturity, and (4) securities issued 
by other federal entities. Nonfederal securities include those issued 
by state and local governments, private corporations, and government-
sponsored enterprises. (SFFAS 1, par. 62; OMB Bulletin 01-09, p. 20, 
section 3.3);

23. Are investments in federal securities reported separately from 
investments in nonfederal securities? (SFFAS 1, par. 67; OMB Bulletin 
01-09, p. 20, section 3.3);

24. Are investments in federal securities initially recorded and 
reported at their acquisition cost or amortized acquisition cost (less 
an allowance for losses, if any)? (SFFAS 1, par. 68 & 69; OMB Bulletin 
01-09, p. 20, section 3.3);

25. Are investments in federal securities acquired in exchange for 
nonmonetary assets recognized at the fair market value of either the 
securities acquired or the assets given up, whichever is more 
definitively determinable? (SFFAS 1, par. 68);

26. Subsequent to acquisition, are investments in federal securities 
reported at their carrying amount (i.e., acquisition cost) adjusted for 
amortized premium or discount? (SFFAS 1, par. 70-71; OMB Bulletin 01-
09, pp. 59 & 60, section 9.5);

27. Is the interest method (i.e., effective interest rate multiplied by 
the carrying amount) used in amortizing the premium or discount over 
the life of the treasury security? (SFFAS 1, par. 71);

28. Is the market value of market-based and marketable securities 
disclosed? (SFFAS 1, par. 72; OMB Bulletin 01-09, pp. 59 & 60, section 
9.5);

29. Are investments grouped by type of security, such as marketable or 
market-based Treasury securities? (SFFAS 1, par. 72);

30. Are investment securities, which are initially expected to be held 
to maturity, reclassified as securities available for sale or early 
redemption, if significant unforeseeable circumstances cause a change 
in the entity's intent or ability to hold these securities to maturity? 
(SFFAS 1, par. 72 & 73; OMB Bulletin 01-09, pp. 59 & 60, section 9.5);

31. If so, is the market value of such securities disclosed? (SFFAS 1, 
par. 72 & 73; OMB Bulletin 01-09, pp. 59 & 60, section 9.5);

32. Does the entity disclose any other information relative to 
understanding the nature of reported investments, such as permanent 
impairments? (OMB Bulletin 01-09, p. 60, section 9.5, item B);

Assets; Accounts Receivable (33 - 49):

33. Is a receivable recognized when a federal entity establishes a 
claim to cash or other assets against other entities based on legal 
provisions or when goods or services are provided? (SFFAS 1, par. 41);

34. If the exact amount of a receivable is unknown, is a reasonable 
estimate made? (SFFAS 1, par. 41);

35. Are receivables from federal entities reported as intragovernmental 
receivables, and reported separately from receivables from nonfederal 
entities? (SFFAS 1, par. 42; OMB Bulletin 01-09, p. 19, section 3.3)?

Entity receivables are amounts due from other federal or nonfederal 
entities that the federal entity is authorized by law to include in its 
obligational authority or to offset its expenditures and liabilities 
upon collection. Nonentity receivables are amounts that the entity is 
to collect on behalf of the federal government or other entities, and 
the entity is not authorized to spend. (SFFAS 1, par. 43);

36. Are receivables not available to an entity disclosed in a note to 
the financial statements as nonentity assets, separate from receivables 
available to the entity? (SFFAS 1, par. 43; OMB Bulletin 01-09, p. 19, 
section 3.3 & p. 56, section 9.2);

37. Are losses on receivables recognized when it is more likely than 
not (greater than a 50 percent chance of occurrence) that the 
receivables will not be totally collected? (SFFAS 1, par. 44);

38. Is an allowance for estimated uncollectible amounts recognized to 
reduce the gross amount of receivables to their net realizable value, 
and is this allowance reestimated on each annual financial reporting 
date and when information indicates that the latest estimate is no 
longer correct? (SFFAS 1, par. 45);

39. Is an allowance for uncollectible amounts based on an analysis of 
both individual accounts receivable and groups of accounts receivable 
as prescribed by the standards? (SFFAS 1, par. 47-51; SFFAS 7, par. 
56);

40. Are accounts that represent significant amounts individually 
analyzed to determine the loss allowance? (SFFAS 1, par. 47);

41. Is the loss estimation for individual accounts based on the 
following?

a. debtor's ability to pay;

b. debtor's payment record and willingness to pay;

c. probable recovery of amounts from secondary sources including liens, 
garnishments, cross collections, and other applicable collection tools 
(SFFAS 1, par. 47);

42. If information is not available to make a reliable assessment of 
losses on an individual account basis or if the nature of the 
receivables does not lend itself to individual account analysis, are 
the potential losses assessed on a group basis? (SFFAS 1, par. 48);

43. If potential losses are assessed on a group basis, are the 
receivables separated into groups of homogeneous accounts with similar 
risk characteristics? (SFFAS 1, par. 49-51);

44. Does the reporting entity disclose the following?

a. major categories of accounts receivable by amount and type;

b. methodology used to estimate the allowance for uncollectible 
amounts;

c. dollar amount of the allowance for uncollectible accounts (SFFAS 1, 
par. 52; OMB Bulletin 01-09, p. 60, section 9.6);

45. Is an account receivable arising from a nonexchange transaction 
recognized when a collecting entity establishes a specifically 
identifiable, measurable, and legally enforceable claim to cash or 
other assets through its established assessment processes to the extent 
the amount is measurable? (SFFAS 7, par. 53, footnote 9, 61-63);

46. Are assessments recognized as accounts receivable if an enforceable 
claim for taxes and duties exists in the following instances?

a. tax returns filed by the taxpayer without sufficient payment;

b. customs documents filed by the importer without sufficient payment;

c. taxpayer agreements to assessments at the conclusion of an audit or 
to substitute for a tax return (or importer agreements to supplemental 
assessments)?

d. court actions determining an assessment;

e. taxpayer (or importer) agreements to pay an assessment on an 
installment plan;

f. receivables determined to be currently not collectible, but with 
future collection potential (SFFAS 7, par. 53, 54, 170, & 171);

47. Is an interentity receivable recognized when (1) a legally 
enforceable claim exists between a collecting entity and a recipient 
entity for the transfer or repayment of taxes or duties and (2) payment 
of such a claim is probable and measurable? (SFFAS 7, par. 60);

Assets; Accounts Receivable (33 - 49);

Compliance assessments are proposed assessments by the collecting 
entity in definitive amounts, but with which the taxpayer (or importer) 
still has the right to disagree or object. (SFFAS 7, par. 55.1)?

Preassessment works-in-process are assessments not yet officially 
asserted by the collecting entity that are subject to a taxpayer's 
right to conference in response to initial information notices. (SFFAS 
7, par. 55.2);

48. Do nonexchange-related accounts receivable for taxes and duties 
exclude the following?

a. amounts received or due with tax returns received after the close of 
the reporting period;

b. compliance assessments;

c. preassessment work-in-process (SFFAS 7, par. 54);

49. Are compliance assessments reclassified and recognized as account 
receivables in the following instances?

a. if the taxpayer files an amended tax return;

b. when customs' protest or retention period lapses;

c. when court action or an appeal finally determines the assessment;

d. if taxpayer (or importer) agrees to pay currently or through an 
installment agreement;

e. if an offer in compromise is accepted (SFFAS 7, par. 55.1 & 178-
180);

Assets; Interest Receivable (50 - 54):

50. Is interest receivable recognized for the amount of interest income 
earned but not received for the accounting period, including interest 
earned on investments in interest-bearing securities? (SFFAS 1, par. 
53; OMB Bulletin 01-09, pp. 20 & 21, section 3.3);

51. Is interest receivable also recognized on outstanding accounts 
receivable and other U.S. government claims against persons and 
entities in accordance with provisions in 31 U.S.C. 3717, Interest and 
Penalty Claims?[Footnote 9] (SFFAS 1, par. 53);

52. Does interest receivable exclude interest on accounts receivable or 
investments that are determined to be uncollectible unless the entity 
actually collects interest? (SFFAS 1, par. 54; OMB Bulletin 01-09, pp. 
20 & 21, section 3.3);

53. Is interest accrued on uncollectible accounts receivable not 
disclosed until (1) the interest payment requirement has been waived by 
the federal government or (2) the related debt has been written off? 
(SFFAS 1, par. 55);

54. Is interest receivable from federal entities accounted for and 
reported separately from interest receivable from the public? (SFFAS 1, 
par. 56);

Assets; Credit Program Receivables (55 - 96):

The Federal Credit Reform Act of 1990, as amended, divides loans and 
loan guarantees into two groups: pre-1992 and post-1991. Pre-1992 
refers to direct loan obligations or loan guarantee commitments made 
prior to fiscal year 1992; post-1991 refers to direct loan obligations 
or loan guarantee commitments made after fiscal year 1991.[Footnote 10] 
(OMB Bulletin 01-09, p. 68, section 9.8, item A);

55. Is interest receivable related to pre-1992 and post-1991 direct 
loans and acquired defaulted guaranteed loans reported as a component 
of credit program receivables and related foreclosed property? (OMB 
Bulletin 01-09, p 21, section 3.3);

56. Are credit program receivables considered an entity asset if at 
least one of the following criteria is met?

a. The entity has the authority to determine the use of the funds 
collected?

b. The entity is legally obligated to use the funds to meet entity 
obligations (e.g., loans payable to Treasury). (OMB Bulletin 01-09, p. 
21, section 3.3);

57. If a loan guarantee program, which guarantees a loan, is generating 
a negative subsidy and the lender has not disbursed the loan as of the 
balance sheet date, does the entity record and include this amount as 
part of the total undelivered orders?[Footnote 11] (OMB Bulletin 01-09, 
p. 21, section 3.3);

58. Are special fund receipt accounts for negative subsidies and 
downward subsidy reestimates included in the credit reporting entity's 
financial statements? (OMB Bulletin 01-09, p. 21, section 3.3);

59. Are any assets in these special receipt fund accounts shown as 
nonentity assets that are offset by intragovernmental liabilities 
covered by budgetary resources? (OMB Bulletin 01-09, p. 21, section 
3.3);

60. Does the entity disclose that direct loan obligations and loan 
guarantee commitments made after fiscal year 1991, and the resulting 
direct loans or loan guarantees, are governed by the Federal Credit 
Reform Act of 1990, as amended? (OMB Bulletin 01-09, p. 68, section 
9.8, instruction A);

61. Are loan amounts broken out by group (pre-1992 and post-1991) and 
loan program and disclosed in a note to the financial statements? (OMB 
Bulletin 01-09, pp. 61 & 70, section 9.8, items B & C);

62. Do the notes disclose other relevant and appropriate information 
related to direct loans and loan guarantees including the following?

a. description of the characteristics of the loan program;

b. commitments to guarantee;

c. management's method for accruing interest revenue and recording 
interest receivable;

d. management's policy for accruing interest on nonperforming loans 
(OMB Bulletin 01-09, p. 69, section 9.8)?

For post-1991 direct loans and guarantees, a subsidy expense is 
recognized in the year they are disbursed. For pre-1992 direct loans 
and guarantees, a loss and liability need not be recognized until it is 
more likely than not that a loan (either direct or guaranteed) will go 
into default. (SFFAS 2, par. 24 & 39);

63. Are post-1991 direct loans disbursed and outstanding recognized as 
assets at the present value (discounted at a comparable Treasury rate) 
of their estimated net cash inflows? (SFFAS 2, par. 22 & app. B, part I 
A);

64. Is the difference between the outstanding principal of post-1991 
direct loans and the present value of their net cash inflows recognized 
as a subsidy cost allowance? (SFFAS 2, par. 22 & app. B, part I A);

65. When post-1991 guaranteed loans default, is the value of the assets 
related to defaulted guaranteed loans receivable[Footnote 12] included 
in the reported credit program receivables? (OMB Bulletin 01-09, p. 64 
& 72, section 9.8, item I);

66. When post-1991 direct loans are written off, is the unpaid 
principal removed from unpaid loans receivable and charged against the 
allowance for subsidy costs? (SFFAS 2, par. 61);

67. Are the following components of the assets that are related to 
post-1991 direct and defaulted guaranteed loans receivable disclosed by 
loan program?

a. loans receivable, gross, or defaulted guaranteed loans receivable, 
gross;

b. interest receivable;

c. estimated net realizable value of foreclosed property;

d. allowance for subsidy costs (present value)?

e. value of assets related to direct loans or defaulted guaranteed 
loans receivable, net (OMB Bulletin 01-09, pp. 61, 64, 70, & 72, 
section 9.8, items C & I);

Assets; Credit Program Receivables (55 - 96)?

Pre-1992 Direct Loans;

68. Are losses of pre-1992 direct loans obligated recognized (and a 
corresponding allowance amount set up) when it is more likely than not 
that the direct loans will not be totally collected? (SFFAS 2, par. 39 
& app. B, part II A);

69. Are allowances for uncollectible pre-1992 loans reestimated each 
year? (SFFAS 2, par. 39);

70. Are the following components of assets related to pre-1992 direct 
loans receivable disclosed by loan program?

a. loans receivable, gross;

b. interest receivable;

c. foreclosed property;

d. present value allowance[Footnote 13] (if the present value method is 
used)?

e. allowance for loan losses[Footnote 14] (if the allowance-for-loss 
method is used) (OMB Bulletin 01-09, pp. 61 & 70, section 9.8 item B);

71. Are the following components of defaulted guaranteed loans from 
pre-1992 guarantees disclosed by loan program?

a. defaulted guaranteed loans receivable, gross;

b. interest receivable;

c. the estimated net realizable value of related foreclosed property;

d. the present value allowance (if the present value method is used)?

e. the allowance for loan losses (if the allowance for loss method is 
used)?

f. value of assets related to defaulted guaranteed loans receivable, 
net of the respective allowance (OMB Bulletin 01-09, pp. 64 & 72, 
section 9.8, item H)?

A loan modification is a federal government action that directly or 
indirectly alters the estimated subsidy cost and the present value of 
outstanding direct loans or the liability of loan guarantees. A direct 
modification changes the subsidy cost by altering the terms of existing 
contracts or through the sale of direct loans. An indirect modification 
changes the subsidy costs by altering the way loans and loan guarantees 
are administered. A modification does not include subsidy cost 
reestimates, routine administrative workouts of troubled loans, and 
other actions permitted within existing contract terms. (SFFAS 2, par. 
41-44);

72. When post-1991 loans are modified, is their existing book value 
changed to an amount equal to the present value of the loans' net cash 
inflows that are projected under the modified terms from the time of 
the modification to the loans' maturity and discounted at the original 
rate? (SFFAS 2, par. 46 & app. B, part I D (4));

73. When pre-1992 loans are directly modified do they meet the 
following conditions?

a. They are transferred from the liquidating account to a financing 
account.;

b. Their book value is recorded at their post-modification value. 
(SFFAS 2, par. 47 & app. B, part II B (4));

74. Are subsequent (direct) modifications of pre-1992 loans treated as 
a modification of post-1991 loans? (SFFAS 2, par. 47);

75. When pre-1992 loans are indirectly modified do they meet the 
following conditions?

a. They are kept in a liquidating account?

b. Their bad debt allowance is reassessed and adjusted to reflect 
amounts that would not be collected due to the modification. (SFFAS 2, 
par. 47);

76. Does the entity disclose the following by program in the notes to 
the financial statements?

a. the nature of the modification of direct loans or loan guarantees;

b. the discount rate used in calculating the modification expense;

c. the basis for recognizing a gain or loss related to the modification 
(SFFAS 2, par. 56; OMB Bulletin 01-09, p. 69, section 9.8, 5th par.);

77. When post-1991 and pre-1992 loans are sold, is the sale treated as 
a direct modification if the agency did not assume sales proceeds in 
the cash flow estimates for the initial subsidy calculation? (SFFAS 2, 
par. 53 & App. B, Part I F, footnote 23);

78. Does the agency disclose the expectation that proceeds from the 
sale of its loans will differ from the reported face value of the loans 
or the value of their related assets? (OMB Bulletin 01-09, p. 69, 
section 9.8, 1st par.)?

Foreclosed property is any asset, which is assumed to be held for sale, 
that is either received in satisfaction of a loan receivable or as a 
result of payment of a claim under a guaranteed or insured loan 
(excluding commodities acquired under price support programs). Pre-1992 
foreclosed property refers to property associated with direct loans 
obligated or loan guarantees committed before October 1, 1991. Post-
1991 foreclosed property refers to property associated with direct 
loans obligated or loan guarantees committed after September 30, 1991. 
(SFFAS 3, par. 79 & 80);

79. Is post-1991 foreclosed property valued at the net present value of 
the projected future cash flows associated with the property? (SFFAS 3, 
par. 81; OMB Bulletin 01-09, p. 70, section 9.8, item C);

80. Is pre-1992 foreclosed property recorded at cost and adjusted to 
the lower of cost or net realizable value with any difference between 
cost and net realizable value carried in a valuation allowance? (SFFAS 
3, par. 81);

81. In determining net present value, does the projection of future 
cash flows include estimates of the following?

a. sales proceeds;

b. rent, management expense, and repair costs during the holding 
period;

c. selling expense (i.e., advertising and commissions) (SFFAS No. 3, 
par. 82);

82. In estimating sales proceeds for projecting the future cash flows 
associated with the property in determining net present value, has the 
entity considered its historical experience in selling property as well 
as the nature of the sale? (SFFAS 3, par. 82);

83. Were the estimated future cash flows of post-1991 foreclosed 
property or acquired loans discounted at the original (or Treasury) 
discount rate in effect at the time the underlying loan or guarantee 
was granted? (SFFAS 2, par. 57& 59; SFFAS 3, par. 83; SFFAS 19, par. 
7(e));

84. Is the net present value of post-1991 foreclosed property adjusted 
periodically to recognize both changes in the expected future cash 
flows and accrual of interest due to the passage of time? (SFFAS 3, 
par. 84);

85. Are any adjustments in the carrying amounts of post-1991 foreclosed 
property included in the presentation of "interest income" and the 
reestimate of "subsidy expense?" (SFFAS 3, par. 84);

86. For post-1991 foreclosed property, are the following true?

a. Third party claims are recorded at their net present value at the 
time of the foreclosure, using the same discount rate that applies to 
related foreclosed property?

b. Any periodic changes in net present value of the claim are reflected 
in "interest income" and "subsidy expense." (SFFAS 3, par. 87);

87. Are receipts or disbursements associated with acquiring and holding 
post-1991 foreclosed property charged or credited to foreclosed 
property? (SFFAS 3, par. 88);

88. When the entity acquires foreclosed assets in full or partial 
settlement of post-1991 direct loans or guarantees, is the present 
value of the government's claim against the borrowers reduced by the 
amount settled as a result of the foreclosure? (SFFAS 2, par. 60);

89. If a lender, debtor, or other third party has a legitimate claim to 
a post-1991 foreclosed asset, is the net present value of the estimated 
claim recognized as a special contra-valuation allowance? (SFFAS 2, 
par. 58; SFFAS 3, par. 87);

90. Is pre-1992 foreclosed property recorded at cost and adjusted, if 
necessary, to the lower of cost or net realizable value? (SFFAS 3, par. 
81 & 85);

91. Is the net realizable value based on an estimate of the market 
value of the property adjusted for any expected losses consistent with 
historical experience, abnormal market conditions, and time limitations 
as well as any other costs of the sale? (SFFAS 3, par. 85 & 86);

92. Is the estimate of market value based on one of the following 
criteria?

a. the market value of the property if an active market exists;

b. the market value of similar properties if no active market exists;

c. a reasonable forecast of expected cash flows adjusted for estimates 
of all holding costs, including any cost of capital (SFFAS 3, par. 85);

93. For pre-1992 foreclosed property, are third-party claims recorded 
at the expected amount of cash required to settle the claims? (SFFAS 3, 
par. 87);

94. If foreclosed property is not sold but placed into operation, is 
the asset removed from foreclosed property? (SFFAS 3, par. 90);

95. If reimbursement for the transfer of assets from one program to 
another is made, are the proceeds from the transfer treated in the same 
manner as a sale to a third party? (SFFAS 3, par. 90);

96. When the government acquires foreclosed assets in full or partial 
settlement of a direct or guaranteed loan (pre-1992 and post-1991), is 
the following information disclosed?

a. valuation basis for foreclosed property;

b. changes from prior-year's accounting methods, if any;

c. restrictions on the use/disposal of property;

d. balances by categories (i.e., pre-1992 and post-1991 foreclosed 
property)?

e. number of properties held and average holding period by type or 
category;

f. number of properties for which foreclosure proceedings are in 
process at the end of the period (SFFAS 3, par. 91; OMB Bulletin 01-09, 
pp. 69 & 70, section 9.8);

Assets; Cash and Other Monetary Assets (97 - 102):

Cash (including imprest funds) consists of: coins, paper currency, 
readily negotiable instruments (such as checks, money orders, and bank 
drafts), demand deposits, and foreign currencies stated in U.S. dollars 
at the exchange rate on the financial statement date. (SFFAS 1, par. 
27; OMB Bulletin 01-09, p. 20, section 3.3)?

Other monetary assets consist of other items such as gold, special 
drawing rights, and U.S. reserves in the International Monetary Fund 
(IMF). (OMB Bulletin 01-09, p. 20, section 3.3 & p.57, section 9.4, 
item C);

97. Are the components of cash and other monetary assets disclosed and 
described in a note to the financial statements? (OMB Bulletin 01-09, 
p. 20, section 3.3 & pp. 57 & 58, section 9.4)?

Entity cash is the amount of cash that the reporting entity holds and 
is authorized by law to spend. Nonentity cash is the cash that a 
federal entity collects and holds on behalf of the U.S. government or 
other entities. In some instances the entity deposits cash in its 
accounts in a fiduciary capacity for the U.S. Treasury or other 
entities. (SFFAS 1, par. 28 & 29);

98. Does cash available for agency use include petty cash and cash held 
in revolving funds that will not be transferred to the general fund? 
(OMB Bulletin 01-09, p.58, section 9.4, instruction E);

99. Is nonentity cash disclosed in the notes to the financial 
statements, separately from entity cash? (SFFAS 1, par. 29; OMB 
Bulletin 01-09, p. 17, section 3.1, p. 19, section 3.3, & pp. 57-58, 
section 9.4);

100. If cash is restricted,[Footnote 15] is the nature and reason 
disclosed? (SFFAS 1, par. 30; OMB Bulletin 01-09, p. 56, section 9.2 & 
p. 58, section 9.4);

101. Does the entity disclose any restrictions on the use or conversion 
of cash denominated in foreign currencies and the significant effects, 
if any, of changes in the exchange rate on the entity's financial 
position that occur after the end of the reporting period but before 
the issuance of financial statements? (OMB Bulletin 01-09, p. 58, 
section 9.4);

102. Is other information on cash and other monetary assets disclosed, 
as appropriate, such as the valuation rate of gold? (OMB Bulletin 01-
09, p. 58, section 9.4);

Assets; Inventory and Related Property (103 - 125):

Inventory is tangible personal property that is (1) held for sale 
including raw materials and work in process, (2) in process of 
production for sale, or (3) to be consumed in the production of goods 
for sale or in the provision of services for a fee. Inventory does not 
include other assets held for sale such as (1) stockpile materials, (2) 
seized and forfeited property, (3) foreclosed property, and (4) goods 
held under price support and stabilization programs. (SFFAS 3, par. 1; 
OMB Bulletin 01-09, p. 21, section 3.3);

103. Is inventory valued at historical cost, latest acquisition cost, 
or net realizable value? (SFFAS 3, par. 20 & 26);

104. If inventory is valued at historical cost, does that cost include 
the purchase amount and all other costs, such as transportation and 
production costs, incurred to bring the inventory into its current 
condition and location? (SFFAS 3, par. 21);

105. Are abnormal costs, such as excessive handling or rework costs, 
charged to operations for the period? (SFFAS 3, par. 21);

106. Is donated inventory valued at its fair value at the time of 
donation? (SFFAS 3, par. 21);

107. Is inventory acquired through exchange of nonmonetary assets 
(e.g., barter) valued at the fair value of the asset received at the 
time of the exchange? (SFFAS 3, par. 21);

108. For inventory acquired through exchange of nonmonetary assets, is 
any difference between the recorded amount of the asset surrendered and 
the fair value of the asset received recognized as a gain or loss? 
(SFFAS 3, par 21);

109. Are one of the following historical cost flow assumptions used to 
value inventory?

a. first-in, first out (FIFO);

b. weighted average;

c. moving average;

d. any other valuation method (such as a standard cost system) whose 
results reasonably approximate "a," "b," or "c" above (SFFAS 3, par. 
22);

110. If the latest acquisition cost method of inventory valuation is 
used, is the latest invoice price (actual cost) applied to all like 
units held, including those acquired through donation or nonmonetary 
exchange? SFFAS 3, par. 23);

111. Under the latest acquisition cost method, is the inventory 
revalued periodically (or at least by the end of the fiscal 
year)?[Footnote 16] (SFFAS 3, par. 23);

112. If unrealized holding gains/losses are recognized, is an allowance 
account established to capture these gains/losses? (SFFAS 3, par. 24);

113. Is the ending balance of this [Footnote gain/loss] allowance 
account the cumulative difference between the historical cost, based on 
estimated or actual valuation, and the latest acquisition cost of 
ending inventory? (SFFAS 3, par. 24);

114. Is the balance for the gain/loss account adjusted each time the 
inventory balance is adjusted? (SFFAS 3, par. 24);

115. Is the adjustment necessary to bring the allowance to the 
appropriate balance a component of the cost of goods sold as computed 
under the latest acquisition cost method?[Footnote 17] (SFFAS 3, par. 
24 & 25);

116. If the latest acquisition cost method is used to value inventory, 
is the reported cost of goods sold adjusted by the difference between 
the beginning and ending unrealized holding gains and losses? (SFFAS 3, 
par. 24 & 25);

117. If inventory is valued at net realizable value, does it meet the 
following criteria?

a. There is an inability to determine approximate cost?

b. There is immediate marketability at quoted prices?

c. There is unit interchangeability (e.g., petroleum reserves). (SFFAS 
3, par. 26);

118. Are inventory stocks, which are maintained because they are not 
readily available in the market or because there is more than a remote 
chance that they will eventually be needed, classified as inventory 
held in reserve for future sale, and reported in one of the following 
manners?

a. included in the inventory line item on the face of the financial 
statements with separate disclosure in the footnotes;

b. shown as a separate line item on the face of the financial 
statements (SFFAS 3, par. 27);

119. Is inventory identified as excess, obsolete, or unserviceable 
reported in one of the following manners?

a. included in the inventory line item on the face of the financial 
statements with separate disclosures in the footnotes;

b. shown as a separate line item on the face of the financial 
statements (SFFAS 3, par. 29; OMB Bulletin 01-09, p. 74, section 9.9);

120. Is excess, obsolete, and unserviceable inventory valued at its 
expected net realizable value? (SFFAS 3 par. 30);

121. When inventory is declared excess, obsolete, or unserviceable is 
the difference between the carrying amount and the expected net 
realizable value recognized as a loss (or gain)? (SFFAS 3, par. 30);

122. For excess, obsolete, or unserviceable inventory, are any 
subsequent adjustments to the inventory's net realizable value or any 
loss (or gain) upon disposal recognized as losses (or gains)? (SFFAS 3, 
par. 30);

123. When inventory is held for repair, is it valued using one of the 
following methods?

a. the allowance method (valued at the same value as a serviceable item 
and a contra-asset repair allowance account is established;

b. the direct method (valued at the same value as a serviceable item 
less estimated repair costs) (SFFAS 3, par. 32 & 33);

124. If inventory is transferred to "inventory held for repair," are 
estimated prior period repair costs either credited to the repair 
allowance (under the repair allowance method) or to the inventory 
account (under the direct method) and reported as an adjustment to 
equity? (SFFAS 3, par. 34);

125. Does the entity disclose the following about its inventory?

a. the general composition;

b. the basis for determining inventory values (including the valuation 
method and any cost flow assumptions)?

c. changes from prior years' accounting methods, if any;

d. balances for each of the following categories of inventory (unless 
otherwise presented on the financial statements):

i. inventory held for current sale;

ii. inventory held in reserve for future use;

iii. excess, obsolete, and unserviceable inventory;

iv. inventory held for repair;

e. the difference between the carrying amount of the inventory before 
identification as excess, obsolete, or unserviceable, and its expected 
net realizable value;

f. restriction on the sale of inventory;

g. the decision criteria for categorizing inventory;

h. changes in the criteria for categorizing inventory (SFFAS 3, par. 
18, 27-29, 31, 32 & 35; OMB Bulletin 01-09, pp. 74 & 75, section 9.9);

Assets; Operating Materials and Supplies (126-137):

Operating materials and supplies are tangible personal property to be 
consumed in normal operations. Excluded are (1) goods that have been 
acquired to construct real property and equipment for the entity's use 
(2) stockpile materials, (3) goods held under price stabilization 
programs, (4) foreclosed property, (5) seized and forfeited property, 
and (6) inventory. (SFFAS 3, par. 36 & OMB Bulletin 01-09, p.21, 
section 3.3);

126. Are operating materials and supplies recognized and reported as 
assets when produced or purchased? (SFFAS 3, par. 38);

127. Are operating materials and supplies valued at historical cost, 
including all appropriate purchase and production costs incurred to 
bring the items to their current condition and location? (SFFAS 3, par. 
42-43);

128. Are donated operating materials and supplies valued at their fair 
value at the time of donation? (SFFAS 3, par. 43);

129. Are operating materials and supplies acquired through exchange of 
nonmonetary assets (e.g., barter) valued at the fair value of the asset 
received at the time of the exchange? (SFFAS 3, par. 43);

130. Are operating materials and supplies acquired through exchange of 
nonmonetary assets (e.g., barter) valued at the fair value of the asset 
received at the time of exchange, and is any difference between the 
recorded amount of the asset surrendered and the fair value of the 
asset received recognized as a gain or loss? (SFFAS 3, par. 43);

131. Is one of the following historical cost flow assumptions used to 
value ending operating materials and supplies under the consumption 
method?

a. first-in, first-out (FIFO)?

b. weighted average;

c. moving average;

d. any other valuation method (such as a standard cost system) whose 
results reasonably approximate "a," "b," or "c" (SFFAS 3, par. 42 & 
44);

132. Are operating materials and supplies stocks, which are maintained 
because they are not readily available in the market or because there 
is more than a remote chance that they will eventually be needed 
(although not necessarily in the normal course of operations), 
classified as operating materials and supplies held in reserve for 
future use, and reported in one of the following manners?

a. included in the operating materials and supplies line item on the 
face of the financial statements with separate disclosure in the 
footnotes;

b. shown as a separate line item on the face of the financial 
statements (SFFAS 3, par. 45);

133. Are operating materials and supplies identified as excess, 
obsolete, or unserviceable reported in one of the following manners?

a. included in the operating materials and supplies line item on the 
face of the financial statements with separate disclosure in the 
footnotes;

b. shown as a separate line item on the face of the financial 
statements (SFFAS 3, par. 47);

134. Are excess, obsolete, and unserviceable operating materials and 
supplies valued at their estimated net realizable value? (SFFAS 3, par. 
48);

135. When operating materials and supplies are declared excess, 
obsolete, or unserviceable is the difference between the carrying 
amount before identification as excess, obsolete, or unserviceable and 
the estimated net realizable value recognized as a loss (or gain)? 
(SFFAS 3, par. 48);

136. For excess, obsolete, or unserviceable operating materials and 
supplies, are any subsequent adjustments to the operating materials and 
supplies' estimated net realizable value or any loss (or gain) upon 
disposal recognized as losses (or gains)? (SFFAS 3, par. 48);

137. Does the entity disclose the following information about its 
operating materials and supplies?

a. general composition;

b. basis for valuation (including valuation method and any cost flow 
assumptions)?

c. change from prior years' accounting methods, if any;

d. balances in each operating material and supply category[Footnote 
18];

e. the difference between the carrying amount of the operating 
materials and supplies before identification as excess, obsolete, or 
unserviceable and their estimated net realizable value;

f. restrictions on the use of materials and supplies, if any;

g. decision criteria for identifying each category to which material 
and supplies are assigned;

h. changes in the criteria for identifying the category to which the 
operating materials and supplies are assigned (SFFAS 3, par. 36, 37, 
45-47, 49, & 50; OMB Bulletin 01-09, p. 75, section 9.9);

Assets; Stockpile Materials (138-150):

Stockpile materials are strategic and critical materials held due to 
statutory requirements for use in national defense, conservation, or 
national emergencies. Not included under this category are (1) items 
held for sale or use in normal operations, (2) items held for use in 
the event of an agency's operating emergency or contingency, and (3) 
materials acquired to support market prices. (SFFAS 3, par. 51 & OMB 
Bulletin 01-09, p. 21, section 3.3);

138. Are stockpile materials recognized and reported as assets when 
acquired (i.e., recognized as assets using the consumption method)? 
(SFFAS 3, par. 52);

139. If the contract between the buyer and seller of the stockpile 
materials is silent regarding passage of the title, is title assumed to 
pass upon delivery of the goods? (SFFAS 3, par. 52);

140. Are stockpile materials valued at historical cost, including all 
appropriate purchase, transportation, and production costs incurred to 
bring the items to their current condition and location? (SFFAS 3, par. 
53);

141. Are abnormal costs, such as excessive handling or rework costs, 
charged to operations for the period? (SFFAS 3, par. 53);

142. Is one of the following historical cost flow assumptions used to 
value stockpile materials under the consumption method?

a. first-in, first-out (FIFO)?

b. weighted average;

c. moving average;

d. any other valuation method (such as a standard cost system) whose 
results reasonably approximate "a," "b," or "c" (SFFAS 3, par. 52 & 
53);

143. If stockpile materials have either suffered a permanent decline in 
value to an amount below cost or have become damaged or decayed, has 
their value been reduced to expected net realizable value? (SFFAS 3, 
par. 54);

144. Is the resultant decline in value recognized as a loss or expense 
in the period in which it occurs? (SFFAS 3, par. 54);

145. When stockpile materials are authorized to be sold, are those 
materials disclosed as stockpile materials held for sale? (SFFAS 3, 
par. 55);

146. Are the stockpile materials authorized for sale valued using the 
same basis used before they were authorized for sale? (SFFAS 3, par. 
55);

147. Is any difference between the carrying amount of the stockpile 
materials held for sale and their estimated selling price disclosed? 
(SFFAS 3, par. 55);

148. If stockpile materials are sold, is the cost removed from 
stockpile materials and reported as a cost of goods sold? (SFFAS 3, 
par. 55);

149. Is any gain (or loss) from the sale of stockpile materials 
recognized as a gain (or loss) at that time? (SFFAS 3, par. 55);

150. Does the entity disclose the following information about its 
stockpile materials?

a. general composition;

b. basis for valuing stockpile materials, including valuation method 
and any cost flow assumptions;

c. changes from prior year's accounting methods, if any;

d. restrictions on the use of the material;

e. balances in each category of stockpile material (i.e., stockpile 
materials and stockpile materials held for sale)?

f. decision criteria for grouping stockpile material as held for sale;

g. changes in criteria for categorizing stockpile materials as held for 
sale (SFFAS 3, par. 56; OMB Bulletin 01-09, pp. 75 & 76, section 9.9);

Assets; Seized Property (151-158):

Seized property includes monetary instruments, real property, and 
tangible personal property belonging to others in actual or 
constructive possession of the custodial agency. This includes illegal 
drugs, contraband, and counterfeit items seized by authorized law 
enforcement agencies (SFFAS 3, par. 59; OMB Bulletin 01-09, p. 22, 
section 3.3)?

There may be as many as three government entities involved with seized 
property: (1) the seizing agency, (2) the custodial agency, and (3) 
another agency with a "central fund" set up for financial recordkeeping 
of seizure activities. (SFFAS 3, par. 57);

151. If the central fund is other than the seizing or custodial entity, 
does the custodial entity maintain sufficient internal records to carry 
out its stewardship responsibility? (SFFAS 3, par. 60);

152. If monetary instruments are seized, are seized assets recognized 
at market value of the monetary instruments, and a corresponding 
liability equal to the seized asset value established? (SFFAS 3, par. 
61 & 65; OMB Bulletin 01-09, p. 22, section 3.3);

153. Is the existence of seized property other than monetary 
instruments disclosed in a note to the statements and accounted for in 
the entity's property management records? (SFFAS 3, par. 62);

154. Is seized property valued at its market value when seized (or as 
soon thereafter as reasonably possible if the market value cannot be 
readily determined)? (SFFAS 3, par. 63);

155. If no active market exists for the property in the general area in 
which it was seized, is a value in the principle market nearest the 
place of seizure used? (SFFAS 3, par. 63);

156. Is the valuation of property seized under the Internal Revenue 
Code based on the taxpayer's equity (market value less any third-party 
liens)? (SFFAS 3, par. 64);

157. Does the entity disclose the type of seized property in its 
custody and include the following information?

a. explanation of what constitutes a seizure and a general description 
of the composition of seized property;

b. valuation method(s)?

c. changes from prior years' accounting methods, if any;

d. analysis of change in seized property (including dollar value and 
number of seized properties) that are;

i. on hand at the beginning of the year,;

ii. seized during the year,;

iii. disposed of during the year, and;

iv. on hand at the end of the year, as well as known liens or other 
claims against the property (SFFAS 3, par. 66; OMB Bulletin 01-09, p. 
22, section 3.3; p. 76, section 9.9);

158. Does the entity also disclose the method of disposal of seized 
property, if material? (SFFAS 3, par. 66; OMB Bulletin 01-09, p. 76, 
section 9.9);

Assets; Forfeited Property (159-172):

Forfeited property consists of (a) property (i.e., monetary 
instruments, intangible property, real property, and tangible personal 
property) acquired through forfeiture proceedings, (b) property 
acquired to satisfy a tax liability, and (c) unclaimed and abandoned 
merchandise. (SFFAS 3, par. 67 & 68 & OMB Bulletin 01-09, p. 22, 
section 3.3);

159. When a forfeiture judgment is obtained for seized monetary 
instruments:

a. Are they reclassified as forfeited monetary instruments at the 
current market value?;

b. Is revenue recognized in an amount equal to the value of the 
monetary asset?;

c. Is the liability associated with the seized monetary instrument 
classification removed? (SFFAS 3, par. 69);

160. When a forfeiture judgment is obtained for real, tangible, and 
intangible property:

a. Is the property recorded as an asset at its fair value at the time 
of forfeiture?

b. Is an allowance account (contra-asset account) established for liens 
or claims from third party claimants against forfeited property?

c. Is offsetting deferred revenue recognized? (SFFAS 3, par. 70);

161. For forfeited property that cannot be sold due to legal 
restrictions, but may be either donated or destroyed, does the entity 
in lieu of recognizing financial value make the required disclosures 
concerning the composition, valuation, and disposition of the property? 
(SFFAS 3, par. 71 & 78);

162. Is revenue from the sale of forfeited property recognized when 
sold? (SFFAS 3, par. 72);

Assets; Forfeited Property (159-172):

Forfeited property not held for sale may be placed into official use, 
transferred to another federal agency, distributed to a state or local 
law enforcement agency, or distributed to a foreign government. (SFFAS 
3, par. 73);

163. When a determination is made that forfeited property will not be 
held for sale, but distributed in one of the manners described above, 
is the property reclassified as forfeited property held for donation or 
use? (SFFAS 3, par. 74);

164. Is revenue associated with property not disposed of through sale 
recognized upon approval of distribution and the previously established 
deferred revenue reversed? (SFFAS 3, par. 74);

165. Is a distinction maintained in the entity's accounting reports 
between revenue arising from the sale of forfeited property and revenue 
arising from forfeited property being transferred, donated, or placed 
into official use? (SFFAS 3, par. 72-75 & Table 1);

166. Is property acquired by the government to satisfy a taxpayer's 
liability recorded when title to the property passes to the federal 
government, and is a credit made to the related account receivable? 
(SFFAS 3, par. 76);

167. Is the property acquired in satisfaction of a taxpayer's liability 
valued at its market value less any third party liens? (SFFAS 3, par. 
76);

168. Upon sale of forfeited property acquired in satisfaction of a 
taxpayer's liability, is revenue recognized in the amount of the sale 
proceeds, and are the property and third party liens removed from the 
accounts? (SFFAS 3, par. 76);

169. Is unclaimed and abandoned merchandise recorded with an offsetting 
deferred revenue when statutory and/or regulatory requirements for 
forfeiture have been met? (SFFAS 3, par. 77);

170. Is unclaimed and abandoned merchandise valued at its market value? 
(SFFAS 3, par. 77);

171. Upon the sale of unclaimed and abandoned merchandise, is revenue 
recognized in the amount of the sale proceeds, and the merchandise and 
the deferred revenue removed from the accounts? (SFFAS 3, par. 77);

172. Does the entity disclose the following information about forfeited 
property?

a. composition of the property;

b. valuation method(s)?

c. restrictions on the use or disposition of forfeited property;

d. changes from prior year's accounting methods, if any;

e. analysis of the changes in forfeited property by dollar amount and 
number of forfeitures that includes:

i. forfeitures on hand at the beginning of the year;

ii. additions;

iii. disposals and method of disposition;

iv. forfeitures on hand at the end of the year;

f. if available, an estimate of the value of property or funds to be 
distributed to other federal, state, and local agencies in future 
reporting periods (SFFAS 3, par. 78; OMB Bulletin 01-09, p. 76, section 
9.9);

Assets; Goods Held Under Price Support and Stabilization Program (173-
186):

Goods acquired under price support and stabilization programs (i.e., 
commodities) are items of commerce or trade (usually farm commodities) 
having an exchange value. Producers of the goods (1) are either given 
nonrecourse loans under which they can, at their option, repay the loan 
with interest or surrender their commodity pledged as collateral for 
the loan or (2) may enter into purchase agreements that allow the 
producer of the option to sell commodities to the government (the 
Commodity Credit Corporation) at the price support rate. (SFFAS 3, par. 
92, 93, & 94);

173. Are nonrecourse loans recognized as assets when the loan principal 
is disbursed and recorded at the amount of the loan principal? (SFFAS 
3, par. 96);

174. Is interest accrued on nonrecourse loans? (SFFAS 3, par. 96);

175. When the entity has entered into a purchase agreement and there is 
an expected loss:

a. Is a loss[Footnote 19] recognized if it is probable that a loss has 
been incurred on purchase agreements outstanding and the amount of the 
loss can be reasonably measured?

b. Is a corresponding liability recognized? (SFFAS 3, par. 97 & 103);

176. If the contingent loss arising from a purchase agreement is not 
recognized because it is less than probable or is not reasonably 
measurable, is the contingent loss disclosed if it is at least 
"reasonably possible that a loss may occur?" (SFFAS 3, par. 98);

177. When commodities are acquired to satisfy a nonrecourse loan or 
purchase agreement, are they recognized and reported as assets at the 
lower of cost or net realizable value? (SFFAS 3, par. 99 & 104);

178. When commodities acquired to satisfy the terms of a nonrecourse 
loan or purchase agreement are sold:

a. Are revenues recognized?

b. Is the carrying amount of the commodities removed from the asset 
account and reported as a cost of goods sold? (SFFAS 3, par. 100);

179. When commodities are held for purposes other than sale, is the 
carrying amount reported as an expense and removed from the commodity 
asset account upon transfer? (SFFAS 3, par. 101);

180. Are all nonrecourse loans recorded at their face amounts, and is a 
valuation allowance set up to recognize losses on such loans when it is 
"more likely than not" (i.e., more than a 50 percent chance) that loans 
will not be totally collected? (SFFAS 3, par. 102);

181. Is this allowance reestimated on each financial reporting date? 
(SFFAS 3, par. 102);

182. Does the cost for the commodities acquired through a nonrecourse 
loan settlement include the following amounts?

a. loan principal (excluding interest);

b. processing and packaging costs incurred after acquisition;

c. other costs (e.g., transportation) incurred in taking title to the 
commodity (SFFAS 3, par. 105);

183. Does the cost for commodities acquired though a purchase agreement 
include the following amounts?

a. the unit price agreed upon in the purchase agreement multiplied by 
the number of units purchased;

b. other costs incurred in taking title to the commodity (SFFAS 3, par. 
106);

184. Is any adjustment necessary to reduce the carrying amount of the 
acquired commodities to the lower of cost or net realizable value 
recognized as a loss on farm price support in the current period and 
recorded in a commodity valuation allowance? (SFFAS 3, par. 107);

185. Are recoveries of losses recognized up to the point of any 
previously recognized losses on the commodities, and is the commodity 
valuation allowance reduced accordingly in the current period? (SFFAS 
3, par. 107);

186. Is the following information related to goods held under price 
support and stabilization programs disclosed?

a. basis for valuing commodities including valuation method and cost 
flow assumptions (e.g., FIFO, weighted average, moving average, 
specific identification)?

b. changes from prior years' accounting methods, if any;

c. restrictions on the use, disposal, or sale of commodities;

d. analysis of the changes in dollar amount and volume of commodities, 
including those;

i. on hand at the beginning of the year;

ii. acquired during the year;

iii. disposed of during the year by method of disposition;

iv. on hand at the end of the year;

v. on hand at year's end and estimated to be donated or transferred 
during the coming period;

vi. received as a result of surrender of collateral related to 
nonrecourse loans outstanding;

vii. dollar value and volume of purchase agreement commitments (SFFAS 
3, par. 108 & 109; OMB Bulletin 01-09, pp. 76 & 77, section 9.9);

Assets; General Property, Plant, & Equipment (Net) (187-233):

General property, plant, and equipment (PP&E) are any property, plant, 
and equipment used in providing goods or services. (SFFAS 6, par. 23);

187. Has the entity established, disclosed, and consistently followed 
appropriate capitalization thresholds for property, plant, and 
equipment (PP&E) suitable to its financial and operational conditions? 
(SFFAS 6, par. 13);

188. Does the entity follow a policy that ensures its PP&E consists of 
tangible assets, including land, that meet the following criteria?

a. have estimated useful lives of 2 years or more;

b. are not intended for sale in the ordinary course of operations;

c. are acquired or constructed with the intention of being used or 
being available for use by the entity (SFFAS 6, par. 17);

189. Does PP&E consist of the following items?

a. assets acquired through capital leases, including leasehold 
improvement;

b. property owned by the reporting entity in the hands of others (e.g., 
state and local governments, colleges and universities, federal 
contractors)?

c. land rights (SFFAS 6 par. 18)?

Capital leases are leases that transfer substantially all the benefits 
and risks of ownership to the lessee. Operating leases are leases in 
which the federal entity does not assume the risks of ownership of 
PP&E. Multiyear service contracts and multiyear purchase agreements for 
expendable commodities are not capital leases. (SFFAS 6, par. 20, 
footnote 22; SFFAS 5, par. 43);

190. Does the entity classify a lease as a capital lease if at its 
inception the lease meets one or more of the following criteria?

a. the lease transfers ownership of the property to the lessee by the 
end of the lease term;

b. the lease contains an option to purchase the leased property at a 
bargain price;

c. the lease term is equal to or greater than 75 percent of the 
estimated economic life of the leased property, and the beginning of 
the lease term does not fall within the last 25 percent of the total 
estimated economic life of the property;

d. the present value of rental and other minimum lease payments, 
excluding that portion of the payments representing executory cost, 
equals or exceeds 90 percent of the fair value of the leased property, 
and the beginning of the lease term does not fall within the last 25 
percent of the total estimated economic life of the property (SFFAS 6, 
par. 20; SFFAS 5, par. 43);

191. Does the general PP&E asset line item exclude the following items?

a. items held in anticipation of physical consumption such as operating 
materials and supplies;

b. items the federal entity has a reversionary interest in;

c. heritage assets (except multiuse heritage assets)[Footnote 20];

d. stewardship land (i.e., land not included in general PP&E) (SFFAS 6, 
par. 19, 21, 57, 58, & 68; SFFAS 16, par. 6);

192. In determining the level at which the entity categorizes its PP&E, 
has the entity considered the following factors?

a. the cost of maintaining different accounting methods for property 
and the usefulness of the information;

b. the diversity of the PP&E (e.g., useful lives, value, alternative 
uses);

c. the programs being served by the PP&E;

d. future disposition of the PP&E (SFFAS 6, par. 22);

193. Does the entity categorize an asset under general PP&E if it has 
one or more of the following characteristics?

a. it could be used for alternative purposes (e.g., by other federal 
programs, state or local governments, nongovernmental entities) but is 
used to produce goods or services or to support the mission of the 
entity;

b. it is used for business-type activities[Footnote 21];

c. it is used by entities in activities whose costs can be compared to 
those of other entities performing similar activities (e.g., federal 
hospital services in comparison to other hospitals) (SFFAS 6, par. 23; 
OMB Bulletin 01-09, p. 22, section 3.3);

194. Is PP&E of entities operating as business-type activities 
categorized as general PP&E whether or not it meets the definition of 
other PP&E categories (e.g., heritage assets)? (SFFAS 6, par. 24; OMB 
Bulletin 01-09, p. 22, section 3.3);

195. Are land and land rights specifically acquired for or in 
connection with other general PP&E included in general PP&E? (SFFAS 6, 
par. 25; OMB Bulletin 01-09, p. 22 & 23, section 3.3);

196. Is all general PP&E recorded at cost? (SFFAS 6, par. 26);

197. Does the cost of general PP&E include all costs incurred to bring 
the PP&E to a form and location suitable for its intended use, such as 
the following?

a. amounts paid to vendors;

b. transportation charges to the point of initial use;

c. handling and storage costs;

d. labor and other direct or indirect production costs (for assets 
produced or constructed)?

e. costs of engineering, architectural, and other outside services for 
designs, plans, specifications, and surveys;

f. acquisition and preparation costs of buildings and other facilities;

g. an appropriate share of the cost of the equipment and facilities 
used in construction work;

h. fixed equipment and related installation costs required for 
activities in a building or facility;

i. direct costs of inspection, supervision, and administration of 
construction contracts and construction work;

j. legal and recording fees and damage claims;

k. fair value of facilities and equipment donated to the government;

l. material amounts of interest costs paid (SFFAS 6, par. 26);

198. Is the cost of general PP&E acquired under a capital lease equal 
to the amount recognized as a liability[Footnote 22] for the capital 
lease at its inception? (SFFAS 6, par. 29);

199. Is the cost of general PP&E acquired through donation, will, or 
judicial process, excluding forfeiture, capitalized at estimated fair 
value at the time acquired by the government? (SFFAS 6, par. 30);

200. Is general PP&E transferred from other federal entities 
capitalized at the book value recorded by the transferring entity? 
(SFFAS 6, par. 31);

201. Is general PP&E transferred from other federal entities 
capitalized at the fair value at the time of the transfer, if the 
receiving entity cannot reasonably ascertain the book value of the PP&E 
being transferred? (SFFAS 6, par. 31);

202. If general PP&E is acquired through exchange between a federal 
entity and a nonfederal entity, is it capitalized at the fair value of 
the PP&E surrendered at the time of the exchange? (SFFAS 6, par. 32);

203. If general PP&E is acquired through exchange between a federal 
entity and a nonfederal entity and the fair value of the PP&E is more 
readily determinable than that of the PP&E surrendered, is the acquired 
general PP&E capitalized at it's fair value? (SFFAS 6, par. 32);

204. If general PP&E is acquired through exchange between a federal 
entity and a nonfederal entity and neither the fair value of the PP&E 
acquired or surrendered is determinable, is the acquired general PP&E 
capitalized at the book value of the PP&E surrendered? (SFFAS 6, par. 
32);

205. If cash is included in an exchange of general PP&E between a 
federal entity and a nonfederal entity, is the cost of PP&E acquired 
increased by the amount of cash surrendered or decreased by the amount 
of cash received? (SFFAS 6, par. 32);

206. For general PP&E acquired through exchange between a federal 
entity and a nonfederal entity, is any difference between the net 
recorded amount of the PP&E surrendered and the cost of the PP&E 
acquired recognized as a gain or loss? (SFFAS 6, par. 32);

207. Is PP&E recognized when title passes to the acquiring entity or 
when PP&E is delivered to the entity or to an agent of the entity? 
(SFFAS 6, par. 34);

208. If general PP&E is under construction, is it recorded as 
construction work in process until it is placed into service and 
transferred to general PP&E? (SFFAS 6, par. 34)?

Depreciation expense is calculated through the systematic and rational 
allocation of the cost of general PP&E, less its estimated salvage or 
residual value over its estimated useful life. (SFFAS 6, par. 35, OMB 
Bulletin 01-09, p. 23, section 3.3);

209. Is depreciation expense recognized on all general PP&E, except 
land and land rights of unlimited duration? (SFFAS 6, par. 35);

210. Do estimates of useful life of general PP&E consider such factors 
as physical wear and tear and technological change? (SFFAS 6, par. 35);

211. Are changes in estimated useful life or salvage and residual value 
of general PP&E accounted for in the period of change and future 
periods? (SFFAS 6, par. 35);

212. Is the depreciation method systematic, rational, and best 
reflective of the use of the PP&E, including the use of a composite or 
a group methodology[Footnote 23] whereby the costs of PP&E are 
allocated using the same allocation rate? (SFFAS 6, par. 35; SFFAS 23, 
par. 9(f));

213. Are depreciation and amortization expenses accumulated in contra-
asset accounts? (SFFAS 6, par. 36);

214. Are costs that either extend the useful life of existing general 
PP&E or enlarge or improve its capacity capitalized and depreciated/
amortized over the remaining useful life of the asset? (SFFAS 6, par. 
37);

215. When general PP&E is disposed of, retired, or removed from 
service, is the asset removed from the asset accounts along with the 
associated accumulated depreciation/amortization? (SFFAS 6, par. 38);

216. Are the differences between the book value of the PP&E and the 
amounts realized, recognized as a gain or loss in the period that the 
general PP&E is disposed of, retired or removed from service? (SFFAS 6, 
par. 38);

217. Is general PP&E removed from general PP&E accounts along with 
associated accumulated depreciation/amortization if prior to disposal, 
retirement, or removal from service, it no longer provides service in 
the operations of the entity? (SFFAS 6, par. 39);

218. Is such PP& E that has been removed from the asset accounts 
recorded in an appropriate asset account at its expected net realizable 
value? (SFFAS 6, par. 39);

219. Is any difference in the book value and its expected net 
realizable value of the about-to-be disposed, retired, or removal-from-
service PP&E recognized as a gain or loss in the period of adjustment? 
(SFFAS 6, par. 39);

220. Is the expected net realizable value of such PP&E assets adjusted 
at the end of each accounting period, and are any further adjustments 
in value recognized as a gain or loss? (SFFAS 6, par. 39);

221. If historical cost information for existing general PP&E has not 
been maintained, are cost estimates based on either of the following 
costs?

a. the cost of similar assets at the time of acquisition;

b. the current cost of similar assets discounted for inflation since 
the time of acquisition (SFFAS 6, par. 40);

222. For general PP&E previously considered national defense PP&E, is 
the initial capitalization amount for these assets the initial 
historical cost for the items including any major improvements or 
modifications? (SFFAS 23, par. 10);

223. For general PP&E previously considered national defense PP&E where 
obtaining initial historical cost is not practical, is estimated 
historical cost used, based on one of the following alternatives?

a. current replacement cost of similar items, deflated through the use 
of price-level indexes to the acquisition year or estimated acquisition 
year if the actual year is unknown;

b. other information indicating amount expended, such as budget, 
appropriation, or engineering documents and other reports reflecting 
amounts expended;

c. other reasonable approaches for estimating historical cost[Footnote 
24] (SFFAS 23, par. 12 & 13);

224. For general PP&E previously considered national defense PP&E that 
was in service upon implementation of SFFAS 23, are cleanup cost 
liabilities adjusted as needed?[Footnote 25] (SFFAS 23, par. 15);

225. Is accumulated depreciation/amortization recorded based on one of 
the following methods?

a. the estimated cost of the PP&E and the number of years the PP&E has 
been in use relative to its estimated useful life;

b. the PP&E's estimated net remaining cost[Footnote 26] and the 
depreciation/amortization charged over the remaining life based on that 
net remaining cost;

c. a composite or a group methodology whereby the costs of PP&E are 
allocated using the same allocation rate (SFFAS 6, par. 41; SFFAS 23, 
par. 9(f));

226. If general PP&E would have been substantially depreciated or 
amortized had it been recorded upon acquisition, does the entity weigh 
materiality and cost-benefit in considering either of the following 
alternatives?

a. record only improvements made during the period beyond the initial 
expected useful life of general PP&E;

b. make an aggregate entry for whole classes of PP&E (e.g., entire 
facilities rather than a building-by-building estimate). (SFFAS 6, par. 
42);

227. In recording existing general PP&E, is the difference in amounts 
added to asset and contra-accounts credited (or charged) to the net 
position of the entity, with the amount of the adjustment shown as a 
"prior period adjustment" in the Statement of Changes in Net Position? 
(SFFAS 6, par. 43);

228. In recording existing general PP&E previously identified as 
national defense PP&E, is the difference in amounts added to asset and 
contra accounts reported as a "change in accounting principle" and 
reflected as an adjustment to the beginning balance of cumulative 
results of operations in the statement of changes in net position, for 
the period the change is made? (SFFAS 23, par. 10 & 16);

229. Does the entity make the following minimum disclosures about its 
general PP&E?

a. the cost, associated accumulated depreciation, and book value by 
major class (e.g., building and structures, fixtures, equipment)?

b. the estimated useful lives for each major class;

c. the method(s) of depreciation for each major class;

d. capitalization threshold(s) including any changes in thresholds(s) 
during the period;

e. restrictions on the use or convertibility of general PP&E (SFFAS 6, 
par. 45; OMB Bulletin 01-09, p. 77, section 9.10)?

Property, plant, and equipment are classified as heritage assets if 
they have (1) historical or natural significance; (2) cultural, 
educational, or artistic importance; or (3) significant architectural 
characteristic. (SFFAS 6, par. 57)?

Multiuse heritage assets are heritage assets that are predominately 
used in general government operations (e.g., buildings such as the main 
Treasury building, which is used as an office building). (SFFAS 16, 
par. 6; OMB Bulletin 01-09, p. 23, section 3.3);

230. If the predominant use of the heritage asset(s) is in general 
government operations, is the acquisition, betterment, or 
reconstruction of the asset(s) capitalized as general PP&E and 
depreciated over its useful life? (SFFAS 16, par. 6 & 9; OMB Bulletin 
01-09, p. 23, section 3.3; p. 98, section 10.2A);

231. Does the entity also include a footnote disclosure explaining that 
"physical quantity" information for the multiuse heritage assets is 
included in supplemental stewardship reporting for heritage assets? 
(SFFAS 16, par. 9; OMB Bulletin 01-09, p. 23, section 3.3; p. 98, 
section 10.2A);

232. Are multiuse heritage assets acquired through donation or devise 
recognized as general PP&E at the assets' fair value? (SFFAS 16, par. 
11);

233. For multiuse heritage assets acquired through donation or devise, 
are the assets fair value also recognized as "nonexchange revenue," as 
defined in SFFAS 7? (SFFAS 16, par. 11);

Assets; Software (234-262):

Software includes the application and operating system programs, 
procedures, rules, and any associated documentation pertaining to the 
operation of a computer system or program?

"Internal use software" is software that is purchased from commercial 
vendors "off the shelf," internally developed, or contractor-developed 
solely to meet the entity's internal or operational needs. (SFFAS 10, 
par. 8);

234. Does the entity capitalize the cost of software when such software 
meets the following criteria?

a. specifically identifiable;

b. determinate life of 2 years or more;

c. not intended for sale in the ordinary course of operations;

d. acquired or developed with the intention of being used by the 
entity;

e. meets the criteria for general property, plant, and equipment in 
that it is used in providing goods and services (SFFAS 6, par. 17; 
SFFAS 10, par. 15 & 38);

235. Does the capitalized cost of internally developed software include 
the full cost (i.e., direct and indirect costs) incurred during the 
software development stage? (SFFAS 10, par. 16);

236. Are capitalized internally developed software development costs 
limited to costs incurred after the following steps have been taken?

a. management authorizes and commits to a computer software project and 
believes that it is more likely than not that the project will be 
completed and the software will be used to perform the intended 
function with an estimated service life of 2 years or more;

b. the conceptual formulation, design, and testing of possible software 
project alternatives (i.e., preliminary design stage) have been 
completed. (SFFAS 10, par. 16);

237. Do software capitalization costs include costs for new 
software[Footnote 27] and documentation manuals? (SFFAS 10, par. 17);

238. Do the capitalized costs for commercial off-the-shelf (COTS) 
software include the amount paid to the vendor? (SFFAS 10, par. 18);

239. Do the capitalized costs for contractor-developed software include 
the amount paid to a contractor to design, program, install, and 
implement the software? (SFFAS 10, par. 18);

240. Does the entity capitalize material internal costs incurred to 
implement the COTS or contractor-developed software and otherwise make 
it ready for use? (SFFAS 10, par. 18);

241. Does the entity expense as incurred all data conversion costs for 
internally developed, contractor-developed, or COTS software as well as 
the cost to develop or obtain software that allows for access or 
conversion of existing data to the new software? (SFFAS 10, par. 19);

242. Does the entity expense costs incurred after the completion of 
final acceptance testing? (SFFAS 10, par. 20);

243. Does the entity treat software that serves both internal uses and 
stewardship purposes[Footnote 28] as internal use software and 
capitalize it to the extent such software meets criteria for general 
PP&E? (SFFAS 10, par. 21);

244. Is computer software that is integrated into and necessary to 
operate general PP&E,[Footnote 29] rather than perform an application, 
considered part of the PP&E of which it is an integral part, and is it 
capitalized and depreciated accordingly? (SFFAS 10, par. 22);

245. If the entity purchased software as part of a package of products 
and services, does it use a reasonable estimate of the relative fair 
value of the individual elements in allocating the cost as 
capitalizable or noncapitalizable (i.e., expense) elements? (SFFAS 10, 
par. 23);

246. If the entity purchased software as part of a package of products 
and services, does it expense software costs that are not susceptible 
to allocation between maintenance and relatively minor enhancements? 
(SFFAS 10, par. 23);

247. Has the entity established capitalization thresholds for its 
internal-use software including bulk purchases of software programs and 
modules or components of a total software system? (SFFAS 10, par. 24);

248. Does the entity capitalize the acquisition cost of enhancements to 
existing internal-use software, as well as related modules, when it is 
more likely than not that they will result in significant additional 
capabilities? (SFFAS 10, par. 25);

249. Does the entity expense, in the period incurred, the cost of minor 
enhancements resulting from ongoing systems maintenance as well as the 
purchase of enhanced versions of software for a minimal charge? (SFFAS 
10, par. 26);

250. Are costs incurred solely to repair a design flaw or to perform 
minor upgrades that may extend the useful life of the software without 
adding capabilities expensed?[Footnote 30] (SFFAS 10, par. 27);

251. Does the entity recognize a loss upon impairment of computer 
software if either of these postimplementation/operational conditions 
apply?

a. the software is no longer expected to provide substantive service 
potential and will be removed from service;

b. a significant reduction occurs in the capabilities, functions, or 
uses of the software (or module thereof) (SFFAS 10, par. 28 & 29);

252. If impaired software is to remain in use, is the loss due to 
impairment measured as the difference between the book value and either 
of the following amounts?

a. the cost to acquire software that would perform similar remaining 
functions (i.e., unimpaired functions)?

b. the portion of book value attributable to the remaining functional 
elements of the software (SFFAS 10, par. 29);

253. If the loss due to impairment cannot be determined, is the book 
value of the software amortized over the remaining useful life of the 
software? (SFFAS 10, par. 29);

254. If impaired software is to be removed from use, is the loss due to 
impairment measured as the difference between the book value and any 
net realizable value (NRV)? (SFFAS 10, par. 30);

255. In situations of impaired software to be removed from use, does 
the entity transfer the NRV, if any, to an appropriate asset account 
until such time as the software is disposed of and the NRV realized? 
(SFFAS 10, par. 30);

256. If the entity's managers conclude that it is no longer "more 
likely than not" that developmental software or a module thereof will 
be completed and placed in service, is the accumulated book value or 
the balance in a work in process account, if applicable, reduced to 
reflect the expected NRV and a loss recognized? (SFFAS 10, par. 31);

257. Does the entity amortize capitalized internal use software 
systematically and rationally over the estimated useful life of the 
software? (SFFAS 10, par. 32);

258. Does amortization of each module or component of a software 
project begin when that module or component has been successfully 
tested? (SFFAS 10, par. 33);

259. If the use of a module is dependent on the completion of another 
module(s), does the amortization begin only when both that module and 
the other module(s) have successfully completed testing? (SFFAS 10, 
par. 33);

260. Are additions to the book value or changes in useful life of 
capitalized software treated prospectively (i.e., during the period of 
change and future periods only) when the software is amortized? (SFFAS 
10, par. 34);

261. When the entity replaces existing internal-use software with new 
software, is the unamortized cost of the old software expensed when the 
new software has successfully completed testing? (SFFAS 10, par. 34);

262. Does the entity disclose, if material, the following information 
regarding its capitalized software?

a. the cost, associated amortization, and book value;

b. the estimated useful life for each major class of software;

c. the method(s) of amortization (SFFAS 10, par. 35; SFFAS 6, par. 45);

Assets; Other Assets (263-268):

263. Does the entity include under the "other" assets category assets 
that are not reported in a separate category on the face of the balance 
sheet? (OMB Bulletin 01-09, p. 23, section 3.3);

264. Are other assets listed and described in a note to the financial 
statements and broken out by major homogenous components and 
intragovernmental versus other (nonfederal) entity assets)? (OMB 
Bulletin 01-09, p. 78, section 9.11)?

Advances are cash outlays made by a federal entity to its employees, 
contractors, grantees, or others to cover the recipient's anticipated 
expenses or as advance payments for the costs of goods and services 
acquired by an entity. (SFFAS 1, par. 57 & OMB Bulletin 01-09, p. 23, 
section 3.3)?

Prepayments are payments made by a federal entity to cover certain 
periodic expenses before those expenses are incurred (SFFAS 1, par. 58; 
OMB Bulletin 01-09, p. 23, section 3.3)?

Progress payments on work in progress are not included in advances and 
prepayments (OMB Bulletin 01-09, p. 23, section 3.3);

265. Are advances and prepayments recorded as assets and disclosed in 
the notes to the financial statements? (SFFAS 1, par. 59; OMB Bulletin 
01-09, p. 23, section 3.3);

266. Are amounts of advances or prepayments that are subject to a 
refund transferred to accounts receivable? (SFFAS 1, par. 59);

267. Are advances and prepayments paid out reported separately as 
assets and not netted against the liability for advances and 
prepayments that the entity received? (SFFAS 1, par. 60);

268. Are advances and prepayments that are made to federal entities 
accounted for and reported separately from those made to nonfederal 
entities? (SFFAS 1, par. 61);

Liabilities; Liabilities in General (269-272):

Liabilities of the federal agencies are reported under two major 
categories: (1) liabilities covered by budgetary resources[Footnote 31] 
and (2) liabilities not covered by budgetary resources.[Footnote 32] 
Within each of these two categories, liabilities are classified as (1) 
intragovernmental liabilities, which are amounts owed to other federal 
entities or (2) governmental liabilities, which are amounts owed to 
nonfederal entities by the federal government or an entity within the 
federal government. (SFFAS 1, par. 21; SFFAS 5, footnote 1 in summary; 
OMB Bulletin 01-09, p. 24, section 3.4 & pp. 78 & 79, section 9.12);

269. Are liabilities covered by budgetary resources and liabilities not 
covered by budgetary resources combined on the face of the balance 
sheet? (OMB Bulletin 01-09, p. 17, section 3.1, p. 24, section 3.4 & 
pp. 78 & 79, section 9.12);

270. Are the amounts and types of liabilities not covered by budgetary 
resources disclosed? (SFFAS1, par. 80 & 86; OMB Bulletin 01-09, p. 17, 
section 3.1 & p. 24, section 3.4);

Liabilities; Liabilities in General (269-272):

271. Does the federal entity recognize a liability for 
probable[Footnote 33] and measurable[Footnote 34] future outflows or 
other sacrifices of resources arising from one or more of the following 
events?

a. past exchange transactions;

b. government-related events, such as a federal entity accidentally 
causing damage to private property;

c. government-acknowledged events, such as natural disasters, for which 
the government has taken formal responsibility for the related costs;

d. nonexchange transactions that, according to current law and 
applicable policy, are unpaid amounts due as of the reporting date 
(SFFAS 5, par. 19-34; OMB Bulletin 01-09, p. 23, section 3.4);

272. Are liabilities recognized when incurred regardless of whether 
they are covered by available budgetary resources (including those 
liabilities related to appropriations canceled under subchapter IV of 
chapter 15 of title 31, United States Code (closing accounts)? (OMB 
Bulletin 01-09, p. 24, section 3.4);

Liabilities; Accounts Payable and Interest Payable (273-280):

Accounts payable are amounts owed by a federal entity for goods and 
services received from, progress in contract performance made by, and 
rents due to other entities. (SFFAS 1, par. 74; OMB Bulletin 01-09, p. 
24, section 3.4);

273. Do accounts payable exclude amounts related to ongoing continuous 
expenses, such as salary and related benefits expense, which are 
classified as other current liabilities? (SFFAS 1, par. 75);

274. Are (intragovernmental) accounts payable owed to other federal 
agencies reported separately from those owed to the public? (SFFAS 1, 
par. 76; OMB Bulletin 01-09, p. 18, section 3.2 & p. 24, section 3.4);

275. When an entity accepts title to goods, whether the goods are 
delivered or in transit, does the entity recognize a liability for the 
unpaid cost of goods? (SFFAS 1, par. 77);

276. If invoices for goods, for which the entity has accepted the 
title, are not available, does the entity estimate the amount owed? 
(SFFAS 1, par. 77);

277. For facilities or equipment constructed or manufactured by 
contractors or grantees according to agreements or contract 
specifications, are amounts recorded as payable based on an estimate of 
work completed under the contract or the agreement in accordance with 
the federal entity's engineering and management evaluation of actual 
performance progress and incurred costs? (SFFAS 1, par. 78 & 79);

278. Does the entity disclose accounts payable not covered by budgetary 
resources? (SFFAS 1, par. 80; OMB Bulletin 01-09, p. 24, section 3.4; 
p. 78, section 9.12);

279. Is interest incurred but unpaid on borrowed funds, late payments, 
and refunds recognized as interest payable and reported as a liability 
at the end of each period? (SFFAS 1, par. 81; OMB Bulletin 01-09, p. 
24, section 3.4);

280. Is interest payable to federal entities reported separately from 
interest payable to the public? (SFFAS 1, par. 82);

Liabilities; Liabilities for Loan Guarantees (281-294):

A loan guarantee is any guarantee, insurance (but not deposit 
insurance), or other pledge with respect to the payment of all or part 
of the principal or interest on any debt obligation of a nonfederal 
borrower to a nonfederal lender. (SFFAS 2, app. C)?

The Federal Credit Reform Act of 1990 requires federal entities to 
estimate and budget for the costs arising from default of guaranteed 
loans made after fiscal year (FY) 1991 (i.e., post 1991). (SFFAS 2, 
par. 7);

281. Is the present value of estimated net cash outflows from post-1991 
(i.e., committed after September 30, 1991) loan guarantees recognized 
as a liability? (SFFAS 2, par. 7 & 23);

282. Does the entity disclose by loan program the face value of 
guaranteed loans outstanding and the amount of outstanding principal 
guaranteed? (SFFAS 2, par. 23; OMB Bulletin 01-09, pp. 60, 65, & 72, 
section 9.8, item J);

283. Does the entity disclose by loan program the estimated 
liabilities[Footnote 35] arising from post-1991 loan guarantees? (OMB 
Bulletin 01-09, pp. 60, 61, 65, & 72, section 9.8, item K);

284. Is a liability for a pre-1992 (i.e., committed before October 1, 
1991) loan guarantee recognized when it is more likely than not that 
the loan guarantee will require a future cash outflow to pay a default 
claim? (SFFAS 2, par. 39 & app. B, part IV A);

285. Does the entity disclose by loan program the estimated liabilities 
arising from pre-1992 loan guarantees? (OMB Bulletin 01-09, p. 25, 
section 3.4; pp. 60 & 72, section 9.8, item K);

286. Are the liabilities for the pre-1992 loan guarantees reestimated 
each year as of the date of the financial statements? (SFFAS 2, par. 
39);

287. Does the entity disclose, by loan program, whether pre-1992 loan 
guarantees are reported on a present-value basis[Footnote 36] or under 
the allowance-for-loss method?[Footnote 37] (OMB Bulletin 01-09, p. 68, 
section 9.8, item A, 4th par.);

288. When the total loan guarantee liability for all of the credit 
programs is negative, is this reported as an asset? (OMB Bulletin 01-
09, p. 25, section 3.4);

289. If loan guarantee liability is the result of both positive and 
negative amounts of the various components, is the total shown as a 
liability, and are the negative components (of the loan guarantee 
liability) disclosed? (OMB Bulletin 01-09, p. 25, section 3.4);

290. When post-1991 loan guarantees are modified, is the existing book 
value of the related liability changed to an amount equal to the 
present value of net cash outflows that are projected under the 
modified terms from the time of the modification to the loan's 
maturity, and discounted at the original discount rate?[Footnote 38] 
(SFFAS 2, par. 50 & app. B, part III D(4); SFFAS 19, par. 7(d));

291. When pre-1992 loan guarantees are directly modified, does the 
following occur?

a. the loan guarantees are transferred from the liquidating account to 
a financing account;

b. the existing book value of the liability of the modified loan 
guarantees is changed to an amount equal to their postmodification 
liability (i.e., the present value of the net cash outflows under 
postmodification terms discounted at the current Treasury rate) (SFFAS 
2, par. 51 & app. B, part IV B (2) & (4));

292. When pre-1992 loan guarantees are indirectly modified, does the 
following occur?

a. The loan guarantees are kept in a liquidating account?

b. The related liability is reassessed and adjusted to reflect any 
change in the liability resulting from the modification. (SFFAS 2, par. 
51);

293. Are subsequent modifications of pre-1992 loan guarantees treated 
as modifications of post-1991 loan guarantees? (SFFAS 2, par. 51);

294. If a post-1991 or pre-1992 loan is sold with a recourse provision, 
is the present value (discounted at the Treasury rate in effect at the 
time of the sale) of the estimated losses recognized as a subsidy 
expense and a loan guarantee liability? (SFFAS 2, par. 54 & app. B, 
part I F(3));

Liabilities; Lease Liabilities (295-300):

Capital leases are leases that transfer substantially all of the 
benefits and risks of ownership to the lessee. (SFFAS 5, par. 43);

295. Is the amount recorded by the lessee as a liability under a 
capital lease arrangement the present value of rental and other minimum 
lease payments (excluding executory costs) during the lease term? 
(SFFAS 5, par. 44);

296. If the present value of the rental and other minimum lease 
payments during the lease term exceeds the fair value of the leased 
property, is the liability recorded as the fair value[Footnote 39] of 
the property at the inception of the lease? (SFFAS 5, par. 44);

297. Does the entity use the applicable Treasury borrowing rate to 
determine the discount rate charged on a capital lease unless both of 
the following apply?

a. It is practicable for the lessee to learn the implicit rate computed 
by the lessor?

b. The implicit rate is less than the Treasury borrowing rate. (SFFAS 
5, par. 45);

298. During the lease term, is each minimum lease payment allocated 
between a reduction of the obligation and interest expense so as to 
produce a constant periodic rate of interest on the remaining balance 
of the liability? (SFFAS 5, par. 46);

299. Does the entity disclose, in a note to the financial statements, 
the following information about its capital leases?

a. gross amounts of assets under capital lease by major asset category 
and the related total accumulated amortization;

b. description of the lease arrangements, for example, future funding 
commitments, lease terms, renewal options, escalation clauses, 
restrictions, amortization periods;

c. future payments due, by major asset category, and deductions for 
imputed interest and executory costs for all noncancelable leases with 
terms longer than 1 year;

d. a breakout of portions of the capital lease liability covered by 
budgetary resources and not covered by budgetary resources (OMB 
Bulletin 01-09, p. 84-85, section 9.17);

300. For operating leases, does the entity disclose the following 
information in a note to the financial statements?

a. description of the lease arrangements, such as future funding 
commitments, lease terms, renewal options, escalation clauses, 
restriction, amortization periods;

b. future payments due, by major asset category, for all noncancelable 
leases with terms longer than 1 year (OMB Bulletin 01-09, p. 84-85, 
section 9.17);

Liabilities; Federal Debt and Related Interest (301-311):

Debts are amounts borrowed from the Treasury, the Federal Financing 
Bank, other federal agencies, or the public under general or special 
financing authority such as Treasury bills, notes, bonds, and Federal 
Housing Administration (FHA) debentures. (SFFAS 5, par. 47; OMB 
Bulletin 01-09, p. 25, section 3.4);

301. Does the entity accounting for federal debt identify the amount of 
the outstanding debt liability at any given time and the related 
interest cost for each accounting period? (SFFAS 5, par. 48);

302. Are fixed-value securities with known redemption or maturity 
amounts at time of issue valued at their original face (par) value net 
of any unamortized discount or premium? (SFFAS 5, par. 50);

303. For fixed-value securities, is either the straight line or 
interest method[Footnote 40] of discount or premium amortization used 
in the following cases?

a. short-term securities with a maturity of 1 year or less;

b. longer term securities, where the difference between the amount of 
amortization under the interest and straight-line methods is immaterial 
(SFFAS 5, par. 50);

304. For fixed-value securities, is the interest method used for 
amortizing any discount or premium on all cases other than those 
described in the previous question? (SFFAS 5, par. 51);

305. If the entity has issued variable value securities of unknown 
redemption or maturity values, are they appraised at their original 
value and periodically revalued on the basis of the regulations or 
offering language? (SFFAS 5, par. 52);

306. Are old currencies issued by the federal government and not yet 
redeemed or written off identified as a noninterest bearing federal 
debt liability at face value? (SFFAS 5, par. 55);

307. Is all debt owed to Treasury, the Federal Financing Bank, or other 
federal agencies reported under intragovernmental liabilities on the 
balance sheet and disclosed by category? (OMB Bulletin 01-09, p. 18 & 
pp. 79-80, section 9.13);

308. Are the beginning balances, net borrowings, and ending balances of 
debt disclosed by the following categories?

a. total Treasury debt (reported by the Treasury Department only) 
broken out by government accounts and debt held by the public;

b. total agency debt issued under special financing authority (e.g., 
Federal Housing Administration (FHA) debentures and Tennessee Valley 
Authority (TVA) bonds) broken out by debt held by government accounts 
and debt held by the public;

c. other debt broken out by debt owed to the Treasury, debt owed to the 
Federal Financing Bank, and debt owed to other federal agencies (OMB 
Bulletin 01-09, pp. 79 & 80, section 9.13);

309. Is all debt owed to the public reported and disclosed as such? 
(OMB Bulletin 01-09, p. 18 & pp. 79-80, section 9.13);

310. Are the names of the agencies disclosed, other than Treasury or 
the Federal Financing Bank, to which intragovernmental debt is owed, 
and are the amounts disclosed? (OMB Bulletin 01-09, p. 80, section 
9.13);

311. Is other information relative to debt disclosed (e.g., redemption 
or call of debt owed to the public before maturity dates, write-offs of 
debts owed to Treasury or the Federal Financing Bank)? (OMB Bulletin 
01-09, p. 80, section 9.13);

Liabilities; Pensions, Other Retirement Benefits, and Postemployment 
Benefits (312 - 319):

Federal employee and veterans benefits include the actuarial portion of 
pensions, other retirement benefits, and other postemployment benefits. 
They do not include liabilities related to ongoing continuous expenses 
such as employees' accrued salary, accrued annual leave, unpaid 
portions of employee benefits, and other benefits that are currently 
due. These items are reported under the "other liabilities" line item. 
(SFFAS 1, par. 83 & 84; SFFAS 5, par. 56; OMB Bulletin 01-09, p. 25, 
section 3.4)?

In the context of accounting for pensions, other retirement benefits 
(ORB), and other postemployment benefits, the "administrative entity" 
manages and accounts for the pension or other employee plan, while the 
"employer entity" employs federal workers and generates employee costs, 
for which it would typically receive a salary and expense 
appropriation. (SFFAS 5, par. 57, footnote 38)?

The "aggregate entry age normal" actuarial cost method is one under 
which the expenses or liabilities arising from the actuarial present 
value of projected pension benefits are allocated on a level basis over 
the earnings or the service of the group between entry age and assumed 
exit ages. The portion of the actuarial present value allocated to a 
valuation year is called "normal cost." (SFFAS 5, par. 64);

312. Is the aggregate entry age normal actuarial cost method used to 
calculate, for the administrative entity financial statements, the 
liabilities arising from pension and ORB expenses? (SFFAS 5, par. 64 & 
82);

313. If other actuarial cost methods are used because the results are 
not materially different, does the entity provide an explanation why 
aggregate entry age normal is not used? (SFFAS 5, par. 64 & 82);

314. Does the administrative entity disclose the assumptions used to 
calculate the liability for pensions, other retirement benefits, and 
other postemployment benefits? (SFFAS 5, par. 67 & 83; OMB Bulletin 01-
09, p. 25, section 3.4; p. 80, section 9.14);

315. If the assumptions for a pension plan differ from the assumptions 
used by the three primary plans--Civil Service Retirement System 
(CSRS), Federal Employees Retirement System (FERS), and Military 
Retirement System (MRS)--does the administrative entity disclose how 
and why the assumptions differ from those of the primary plans? (SFFAS 
5, par. 67; OMB Bulletin 01-09, p. 80, section 9.14);

316. Does the administrative entity report pension and ORB assets 
separately from liabilities as opposed to netting them out? (SFFAS 5, 
par. 68 & 85);

317. Does the administrative entity carry pension and ORB assets at 
their acquisition cost, adjusted for amortization, if appropriate? 
(SFFAS 5, par. 68 & 85);

318. Does the administrative entity disclose the market value of 
pension and ORB investments in market-based and marketable securities? 
(SFFAS 5, par. 68 & 85);

319. Does the employer entity recognize the long-term other 
postemployment benefits liability as the present value of future 
payments discounted at the Treasury borrowing rate for securities of 
similar maturity? (SFFAS 5, par. 95);

Liabilities; Other Liabilities (320 - 353):

Unless they are reported separately, other liabilities cover 
liabilities not recognized in other categories. They may include, but 
are not limited to: capital leases, insurance, advances and 
prepayments, deposit funds held in escrow, accrued liabilities related 
to ongoing continuous expenses such as federal employee salaries and 
accrued employee annual leave, and estimated losses for claims and 
other contingencies. Claims and other contingencies include indemnity 
agreements, adjudicated claims, and commitments to international 
institutions. (SFFAS 1, par. 83-86; OMB Bulletin 01-09, p. 26, section 
3.4);

320. Does the entity separately report items within other liabilities 
if the amounts are material? (OMB Bulletin 01-09, p. 26, section 3.4);

321. Do all federal insurance and guarantee programs (except social 
insurance and loan guarantee programs) recognize a liability for unpaid 
claims incurred resulting from insured events that have occurred as of 
the reporting date? (SFFAS 5, par. 104; OMB Bulletin 01-09, p. 26, 
section 3.4);

322. Do federal insurance programs accrue a contingent liability when 
an existing condition, situation, or set of circumstances involving 
uncertainty as to possible loss exists, and when the following 
conditions apply?

a. the uncertainty will be resolved when one or more probable future 
events occur or fail to occur?

b. future outflow or other sacrifice of resources is probable and 
measurable. (SFFAS 5, par. 104 & 108; OMB Bulletin 01-09, pp. 26 & 27, 
section 3.4);

323. Does the entity also recognize a liability for future life 
insurance policy benefits (such as death or disability)? (SFFAS 5, par. 
104; OMB Bulletin 01-09, p. 27, section 3.4);

324. When insurance payments and losses extend beyond the current year, 
does the liability at the end of the year represent net losses 
calculated on a present-value basis to reflect the time value of money? 
(SFFAS 5, par. 109);

325. Does the entity report under "required supplementary information" 
(RSI) the major assumptions and "risks assumed" (i.e., the present 
value of unpaid expected losses net of associated premiums based on 
risk inherent in the insurance or guarantee coverage) for all sponsored 
insurance programs (except for social insurance, life insurance, and 
loan guarantee programs)? (SFFAS 5, par. 105 & 106; SFFAS 25, par. 4);

326. Does the entity also report under RSI the indicators of the range 
of uncertainty around insurance-related estimates and sensitivity of 
the estimates to changes in major assumptions? (SFFAS 5, par. 114; 
SFFAS 25, par.4);

Liabilities; Other Liabilities (320 - 353):

The liability for future policy benefits is the present value of future 
outflows to be paid to (or on behalf of) policyholders, less the 
present value of future related premiums. In general, for whole life 
policies, the liability for future policy benefits should be no less 
than the cash surrender value that accrues to the benefit of the 
policyholder. (SFFAS 5, par. 116);

327. Are liabilities for future benefits of whole life insurance 
policies reported and disclosed in accordance with private sector 
standards (i.e., Financial Accounting Standards Board (FASB) Statement 
of Accounting Standards (SFAS) 60, 97, & 120; American Institute of 
Certified Public Accountants (AICPA) Statement of Position (SOP) 95-1)? 
(SFFAS 5, par. 117; OMB Bulletin 01-09, p. 85, section 9.18);

328. Does the liability for future benefits relating to participating 
life insurance contracts equal the sum of the following amounts?

a. the net level premium reserve for death and endowment policy 
benefits;

b. liability for terminal dividends and;

c. any premium deficiency[Footnote 41] (SFFAS 5, par. 118 & 120);

329. Has the entity made an assessment to compare the liability for 
future policy benefits using actuarial assumptions applicable at the 
time the contract was made (contract assumptions) with the liability 
for future policy benefits using assumptions that consider the 
following factors?

a. current economic conditions (i.e., current and expected investments 
and expected long-term yields)?

b. experience (i.e., mortality, morbidity, and termination rates) 
(SFFAS 5, par. 119);

330. Does the entity separately disclose the components[Footnote 42] of 
the liability for future policy benefits of whole life insurance 
contracts along with a description of each amount and explanation of 
its projected use and any other potential uses? (SFFAS 5, par. 121; OMB 
Bulletin 01-09, p. 85, section 9.18);

331. Does the reporting entity disclose and break out the following 
items?

a. the portion of other liabilities covered by budgetary resources and 
the portion not covered by budgetary resources;

b. the portion of other liabilities payable to federal entities (i.e., 
intragovernmental liabilities) and the portion payable to nonfederal 
entities;

c. the portion of other liabilities that are noncurrent and the portion 
that are current (SFFAS 1, par. 85 & 86; OMB Bulletin 01-09, pp. 78 & 
79, section 9.l2 & pp. 81 & 82, section 9.16);

332. Does the agency record "unearned revenue" as a liability if it 
requests advances or progress payments prior to receipt of cash, and it 
records the amounts? (SFFAS 7, par. 37);

333. Are amounts payable for refunds, refund offsets,[43] and drawbacks 
[Footnote 44] recognized as liabilities when measurable and legally 
payable under established processes of the collecting entity? (SFFAS 7, 
par. 57);

334. Do amounts payable for refunds include refund claims filed by the 
taxpayer when the government has determined the amount refundable and 
identified the payee? (SFFAS 7, par. 57);

335. Are amounts payable for refunds with respect to returns or claims 
filed as of the end of the reporting period included in accounts 
payable for refunds if they do not require specific approval before 
payment? (SFFAS 7, par. 57);

336. For claims filed for refunds where specific administrative actions 
are required before payments can be made, are the amounts excluded from 
being recognized as a liability if the required administrative actions 
are not yet complete as of the close of the reporting period, even if 
reasonably estimable? (SFFAS 7, par. 58.1);

337. Are unasserted claims for refunds by taxpayers or importer