AGA Today

Federal Accounting Corner

Revenue and the Statement of Financing

One of the most confusing external reports is the Statement of Financing (SoF). Accounts are frequently assigned to multiple lines, and it is not clear if these are mutually exclusive or if their balances are to appear on each line. This column focuses on how revenue is reported on the SoF.

Statement of Financing Purpose

The SoF starts with total obligations, nets out non-expenditure activity, offsets collections and adds in non-budgetary expenses to derive Net Cost. It thus forms a bridge between the Statement of Budgetary Resources (SBR) and the Statement of Net Cost (SNC). Revenues are initially represented by offsetting collections (and receivables) from the SBR, but any revenues that have no budgetary impact must also be added in, and any revenues supported by the budget but excluded from the SNC have to be deducted. 

Revenue and Collections

Revenue collections are represented on multiple lines of the Statement of Financing. If they are for reimbursements or otherwise fund operations, they appear on line 2 (these are known as offsetting collections and also appear on lines 3 and 4 of the SBR). If they go into a special receipt or trust fund that is maintained by the agency, they appear on line 4 (these are known as distributed offsetting receipts and also appear on line 16 of the SBR, but would not appear on SBR lines 3 or 4). Now if, for some reason, the collection appears on line 3, 4, or 16 of the SBR but the associated revenue does not appear on the Statement of Net Costs, it is backed out in 14A (for credit reform) or 14B (for all other revenue). Trust funds with exchange revenue can also report them on line 27, but I'm not certain if that line is backing them out or adding them back in.

The SGL is of little use when reporting revenue on the SoF, because the distinctions being made are based on the type of fund and not the SGL account. SoF lines 2 and 14A actually use the budgetary collection and receivable accounts (4212, 4221-4225 and 4251-4287), while lines 4, 14B, and 27 use the proprietary revenue accounts (5100-5609, 5750, 5800-5909). Since proprietary revenue accounts are normally credited when the budgetary collection and receivable accounts are debited, lines 4 (and possibly 14B) can be derived by netting the two against each other. The only surviving entries would be in funds that don't post budgetary authority.

In fact, SoF Line 4 must agree with the cash reported on the FMS-224, so the only proper SGL account is 1010 Fund Balance with Treasury, as the revenue accounts can include accrual activity as well. —by Simcha Kuritzky, CGFM, CPA

This column is provided as part of a free exchange of ideas in federal accounting, and is not reviewed substantively before publication.  Please send all comments, queries, or corrections to Simcha.Kuritzky@CGIFederal.com.