Complete this closing package for each fund that has total Loans or Notes Receivable of $50,000 or more at June 30.
PURPOSE
The purpose of this closing package is to gather information regarding certain receivables from non-state parties. This information will be used to prepare the State's Comprehensive Annual Financial Report (CAFR).
ACCOUNTING PRINCIPLES AND POLICIES
The State prepares its financial statements in accordance with Generally Accepted Accounting Principles (GAAP). GAAP requirements for reporting loans and notes receivable outstanding at June 30 are found in the following authoritative pronouncements:
- Governmental Accounting Standards Board (GASB) Statement 34, ¶100, footnote 41
- GASB Statement 38, ¶13
- GASB Statement 65, ¶ 22-24
- NCGAS 1, ¶119 (As amended by GASB Statement 33, ¶ 17, Statement 54, ¶ 5, and Statement 65, ¶ 30)
- Chapter 6 of State and Local Governments Audit and Accounting Guide (AICPA, 2016 edition)
GAAP requires the State to record the following:
- Loans and notes receivable outstanding at June 30
- A reserve for long-term loans and notes receivable
- An allowance for uncollectible loans and notes receivable in each fund where applicable
- Interest receivable for related interest due on or before June 30, but not yet received
Receivables at June 30 from non-state parties include:
- Loans and Notes Receivable (GL 1305 and 1306)
- Allowance for Uncollectible Loans or Notes (GL 1325)
- Interest Receivable on the above (GL 1309)
This information may or may not be recorded in STARS. Complete the forms for all information whether or not it has been recorded in STARS.
GAAP INDICATOR
If GAAP Indicators are used when processing transactions in STARS, the GAAP Indicator Report, DAFR0227, can be submitted in lieu of transcribing the information on the closing package.
GAAP Indicator applicable to the Loans and Notes Receivable Closing Package:
O - Interest Receivable
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Click here for a GAAP Indicator Explanation
DEFINITIONS
Allowance for Uncollectible Receivables – The amount of receivables that is estimated to be uncollectible.
Interest Receivable – Related interest earned on or before June 30, but not yet received.
Loans Receivable – Outstanding principal balances at June 30 on loans the State made to non-state parties. Loans receivable include balances for which the State holds collateral or security.
Notes Receivable – Notes receivable are a type of loan receivable. In certain cases, the State may lend money to a non-state party under a note. A note is a written document in which a borrower promises to repay the money to the State, or to a party the State indicates, on demand or at a particular future time. If any capital assets were sold by installment sales, these are notes receivable.
Origination Fees - Fees charged to the borrower in connection with originating, refinancing, or restructuring a loan.
WORKING PAPERS
Click here for a definition of Working Papers
GENERAL INSTRUCTIONS--LOANS AND NOTES RECEIVABLE
- Complete a separate form for each fund.
- Internal schedules may be submitted in lieu of closing packages, if they provide all required information.
- Round all dollar amounts to the nearest whole dollar.
- CLICK HERE FOR SUBMISSION INSTRUCTIONS.
- Submit the completed form by July 13.
COMPLETING THE LOANS AND NOTES RECEIVABLE CLOSING PACKAGE
- Complete the header information.
- For Each Fund-Enter the amount of the note/loan receivable (principal portion only) due within one year (by June 30, 2018).
- Enter the amount of the note/loan receivable (principal portion only) due beyond one year (collected after June 30, 2018).
- Enter the amount of receivables deemed uncollectible (principal amount only). Your agency must estimate the uncollectible amount. You may choose to base the estimate on historical data in the following manner:
- Gather historical data on revenue collectability.
- Evaluate the collectability of receivables at June 30.
- The total amount that was reported in the prior year closing package will be calculated for you. If the prior year amount differs from the current year by 10% and the change equals or exceeds $100,000, please explain the reason for the variance in the Comments section of the form.
- Enter the amount of borrower origination fees, if applicable.
- Enter the amount received for points in relation to loan origination, if applicable.
- Enter the amount of commitment fees to originate a loan, if applicable.
- Enter the amount of fees related to the purchase of a loan or group of loans, if applicable.
- Enter the original date of the loan or note.
- Enter a brief description of the loan or note.
- Enter the revenue subobject used to record the note or loan receivable, if applicable.
- Enter the principal balance of the note or loan receivable at June 30.
- Enter the total amount of the receivables deemed uncollectible for the fiscal year.
- On the next line enter the revenue subobject used to record the interest receivable, and the balance of interest receivable actually earned as of June 30, but not yet received (post-June 30 interest receivables/earnings are not needed).
- If a note receivable was exchanged for a State-owned capital asset, please make mention of that in the Comments section.
11 Loans and Notes Receivable
GL 1305, 1306, 1309, 1310, 1325 | Due Date: July 13 |