Non-monetary acquisitions are assets acquired without current fiscal year expenditure. Except for ancillary costs, no cash is expended to acquire the asset. A non-monetary item is usually stated in “older” dollars, and therefore requires direct entry in to FAS. FAS Transaction Codes for donations are described as ‘non-monetary’, though for financial statement purposes, donations are recorded as revenue in the year of donation.

Donations

Revenue is recognized in the acquisition of an asset by donation:

Asset
	Revenue

 

Donations are voluntary, non-exchange transactions given to the State by individuals or non-state entities.  Donated assets must be reported at the estimated fair market value* at the time of acquisition. (Assets acquired from another agency will be treated as a transfer.) 

 

*Fair market value is the amount at which the asset could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.  Estimated fair value at acquisition may be calculated from manufacturer catalogs, price quotes in periodicals, recent sales of comparable asset, or other reliable information.  Professional assistance may be helpful, but is not required. (GASB 34 Implementation Guide I, Q28).

 

One exception to recording and capitalizing a donation is for certain works of art and historical treasures (AHT).  Capitalizing these assets is optional if all of the following conditions are met:

 

• Held for public exhibition, education, or research in furtherance of public service, rather than financial gain.
• Protected, kept unencumbered, cared for, and preserved.
• Subject to organizational policy that requires the proceeds from sales of collection items to be used to acquire other items for collections.
• Not capitalized as of June 30, 1999 (Collections capitalized at June 30, 1999, should remain capitalized and all additions to those collections should be capitalized, even if they meet the conditions for exemption from capitalization. GASB 34, paragraph 27).

Art and historical treasures must be reported in a AC​FR closing package regardless of the estimated value (this is used in a Note to the financial statement).  These assets do not depreciate, which is handled in FAS by setting the Useful Life indictor to zero (edits will force when recording the asset).  GASB and SCO encourage capitalizing art and historical treasures.  However, GASB guidance does allow that an entity can opt to not capitalize them if the above specific conditions are met.

Donated capital assets should be booked directly into FAS at their estimated FMV (fair-market value) plus any necessary ancillary cost* at the time of acquisition. GASB 34 requires that capital assets acquired by donation be recorded as revenue in the year of acquisition.  

*Ancillary Costs (Excerpt from FPAC) - Costs, in addition to purchase or construction costs, related to placing a capital asset into its intended state of operation.  Normally, ancillary costs are included in the cost of a capital asset.  However, minor ancillary costs may be expensed. Ancillary costs include the following:

For Land:

Legal and title fees, surveying fees, appraisal and negotiation fees, damage payments, site preparation costs, costs related to demolition of unwanted structures, and other expenditures/expenses necessary to place the asset into its intended state of operation.

For Buildings and Improvements Other Than Buildings:

Professional fees of architects, attorneys, appraisers, financial advisors, and similar fees; damage claims; costs of fixtures permanently attached to a building; insurance premiums, interest expense (for proprietary fund assets), and related costs incurred during construction; and other expenditures/expenses necessary to place the asset into its intended state of operation.

For Machinery, Equipment, & Other:

Transportation charges, installation costs, and any other normal and necessary expenditures/expenses required to place the asset into its intended state of operation

For Infrastructure:

Landscaping, curbs, gutters, sidewalks, noise abatement walls, and any other necessary expenditures/expenses to place the asset into its intended state of operation. (Note: For ACFR purposes only the Idaho Transportation Department (ITD) will be using the Infrastructure class. All other agencies will report infrastructure-like assets under the Improvements Other Than Buildings class.)

Enter a Donation in FAS

Donation transactions are entered directly into FAS Data Entry Screen S035 using FAS TCs A11-A14, which are described as ‘non-monetary’ transaction codes.  A current date must be entered in the ADT Date field and the date the asset is available for use in the INSERV Date (in-service date) field.

 

The ADT AMT (acquisition/disposition/transfer amount) field on the data entry screen becomes the original amount on the FAS Property File record S040 screen. This should be for the estimated fair market value of the asset plus any ancillary costs at the time of the donation.

 

The agency should determine the fund or combination of funds to record the asset. Often agencies will enter the fund (and budget unit) of the area where the donated asset will be used. As a guideline, agencies could use funds that meet any of the following criteria:

 

• Funds that have use of the asset.
• Funds that pay for maintenance/insurance, etc. for the asset.
• Funds used if the asset was disposed.

Depending on the fund type, FAS will generate one of the following to record the asset in the appropriate STARS general ledger account:

• A STARS 8GJ governmental fund transaction code
• A STARS 8FJ proprietary fund transaction code 

These transactions will generate when the asset has a capitalization indicator of ‘S’ (statewide capitalized asset) and when the FAS TC successfully posts. However, STARS transaction codes 8GJ and 8FJ have been end-dated so that they will not process in STARS, but can be corrected.

• The FAS-generated STARS transaction code for Governmental Funds is 8GJ – DONATIONS – ERRORS OUT RESET TO 8GQ.  The 8GJ will generate a transaction that will post to fund 0700 in STARS. Any fund details will drop off the transactions before they are sent to STARS.
• The FAS-generated STARS transaction code for Proprietary Funds is 8FJ – DONATIONS – ERRORS OUT RESET TO 8FQ.  The 8FJ will generate a transaction that will post to the applicable proprietary fund in STARS. These transactions will support the posting to the fund detail.

Regardless of the fund type on the asset record, the transactions will be in an ‘F’ batch.  By Design, the 8GJ for Governmental Funds and the 8FJ for Proprietary Funds will error when they are sent from FAS to STARS.

An error message on the STARS General Purpose Transaction Entry S501 screen will indicate an end-date on the transaction code. 

 

Personnel from Accounting Operations will correct the ‘F’ batch by updating the transactions with NEW transaction codes 8GQ – DONATIONS – DR ASSET & CR GAAP REV – GOV (governmental) and 8FQ – DONATIONS – DR ASSET & CR GAAP REV (proprietary) and entering a proper revenue subobject.

 

The proper revenue subobject will depend on the funding source recorded on the funding source screen in FAS.  The proper revenue subobjects used when updating the STARS 8GQ and 8FQ transactions are:

 

Subobject	Title
2070	Federal Capital Grants & Contributions
2170	State Capital Grants & Contributions
2270	City/county Capital Grants & Contributions
3614	Other Capital Grants & Contributions

 

To determine the funding source or sources, recall the asset on the FAS 40 Screen.  Press F7 to go to the funding source screen and note the FUND/DT (Fund/Fund detail) code.  The necessary revenue subobject may be obvious for some funding sources.  For example, Fund 0348 will always be revenue sub-object 2070 and Fund 0001 will always be revenue subobject 2170.

 

Other funds may require additional research such as reviewing the FUND/DT on Descriptor Tables 22 or 23.  If those tables do not help, ask the FAS contact at the agency who or what entity donated the item so that you can select the appropriate revenue subobject.

 

Once the donation source has been identified, have an SCO/DSA data entry person change the transaction code (if originally 8GJ or 8FJ) and enter the appropriate revenue subobject.  SCO/DSA staff with a FAS release level of 7 or higher can then release the batch.

Transaction Codes and T – Account Examples

The transaction codes to post an acquisition by donation directly entered into FAS are described below.

1. FAS TC A11-A14 - Enter transactions in FAS Data Entry Screen 35. These transactions will update the Property File and generate a STARS TC for capitalized assets. For non-capitalized assets no transactions will be sent to STARS.

2. FAS-generated transaction codes are compiled in an ‘F’ batch sent to STARS.

a. STARS TC 8GJ –DONATIONS – ERRORS OUT RESET TO 8GQ. This governmental fund transaction codes is generated from FAS TCs AR1-AR4 and A11-A14. The STARS TC has been end-dated so it will error and not process. It should be changed to 8GQ. Both TCs require a revenue subobject based on the funding source.

b. STARS TC 8FJ –DONATIONS – ERRORS OUT RESET TO 8FQ. This proprietary fund transaction will error because of the STARS transaction code end-date. It should be changed to 8FQ. Both TCs require a revenue sub-object based on the funding source.

3. STARS – Accounting Operations Updates the Erred ‘F’ batch.

a. Correct erred transactions for governmental fund 0700 with STARS TC 8GQ – DONATIONS – DR ASSET & CR GAAP REV – GOV. Update the transactions with this transaction code and enter a proper revenue subobject.

b. Correct erred transactions for Proprietary Funds with STARS TC 8FQ – DONATIONS – DR ASSET & CR GAAP REV. Update the transactions with this transaction code and enter a proper revenue subobject.

The next example illustrates how these transactions post to various files. The example assumes that a business entity donated a personal computer to a state agency.  The computer has an estimated FMV of $5,500.  The asset must be entered directly into FAS Data Entry Screen S035. Agency management decided the value of the donated asset would be split between Fund 0450-05 (proprietary) and Fund 0001 (governmental).
 

FAS Property File
1. TC A14	Post to the Property File original amount $5,500 Post to the Property File funding sources:
	Fund 0001	$2,500
	Fund 0450 05	$3,000
FAS generates transaction codes by fund type to update to STARS in an ‘F’ batch.  All governmental fund transactions will post to STARS governmental fund 0700.

 

 

STARS General Ledger
STARS – ‘F’ batch with FAS generated TC errors
2.a	STARS TC 8GJ – DONATIONS – ERRORS OUT RESET TO 8GQ for Governmental Funds (0700) will have to be manually updated by Accounting Operations.
2.b	STARS TC 8FJ – DONATIONS – ERRORS OUT RESET TO 8FQ for Proprietary Funds will have to be manually updated by Accounting Operations.

 

In STARS, Accounting Operations will update the ‘F’ batch with new TCs and revenue subobjects.  Once the batch is released, the following GLs will be updated:

 

FUND 0700 – Governmental Fund Group

Asset – GL by asset class (1750 Mach. & Equip.)

GAAP Revenue – GL  4500

3.a

TC 8GQ

$2,500

3.a

TC 8GQ

$2,500

FUND 0450 05 – Proprietary

Asset – GL by asset class (1750 Mach. & Equip.)

GAAP Revenue – GL  4500

3.b

TC 8FQ

$3,000

3.b

TC 8FQ

$3,000

 

At year-end closing, the impact in GRS for financial reporting will be:

 

Record the asset at FMV and record revenue:

           

Asset
	GAAP Revenue

Recording Substantive Ancillary Costs

In STARS general ledgers (GL), it is important that current year (budgetary) costs are kept separate from the recording of revenue from donations.  Current year costs (expenditures) should go through GL – 4200 Expenditures and GL – 4600 GAAP Expense. 

 

The recording of the revenue generated from the donation should flow through to GL – 4500 GAAP Revenue and the asset GL for the class of asset, for example, GL 1750 to record Machinery and Equipment.

 

For example:

 

• A vehicle with a FMV of $25,000 is donated to the State Police.
• State Police spends $10,000 to convert the vehicle into a Police Cruiser.
• The $10,000 will originate in STARS and will generate a TC A04 –Record the Purchase of Machinery and Equipment from STARS in the Hold File
• Now the asset has a value of $35,000

To record the asset, expenditure, and the revenue properly, use the following steps:

1. Enter the asset on FAS Direct Data Entry screen 35 with FAS Transaction Code A14 at FMV plus ancillary costs, which would be $35,000 ($25,000 + $10,000).

2. In the FAS Hold File, delete the A04 transaction for $10,000.

3.   In STARS, the FAS generated transactions will error and will have to be updated. The FAS generated transactions for Governmental Funds is 8GJ – DONATIONS – ERRORS OUT RESET TO 8GQ. The FAS generated transaction for Proprietary Funds is 8FJ – DONATIONS – ERRORS OUT RESET TO 8FQ.  Regardless of fund type, the transactions will compile into an ‘F’ batch.  The amount of the transactions should equal $35,000 for this asset.

4.  Personnel from Accounting Operations will have to update the transactions as follows:

• To book the asset and revenue – Update the 8GJ and 8FJ transactions to 8GQ and 8FQ, so that the total is equal to $25,000. The revenue subobject will have to be manually entered. The 8GQ and 8FQ transactions will debit the asset and credit GAAP revenue.
• To offset the current year expenditure and book the asset – Add/update the transaction codes with transaction codes 8GD (governmental) and 8FD (proprietary) for $10,000.  Manually enter the expenditure subobject. The 8GD and 8FD transactions will debit asset and credit GAAP expense.

At year-end closing, the financial reporting impact will be:

Record the asset at FMV plus ancillary cost:
Asset		$35,000
	Cash		$10,000
	GAAP Revenue		$25,000

Transfers

Transferring an asset between agencies simply means that one agency sends an asset to another agency. The agency transferring the asset out is referred to as the "transfer out" agency and the agency receiving the asset is referred to as the "receiving agency". Usually agencies make non-monetary transactions.

 

The book value of the asset is an important factor in determining how to record the transaction.

If the book value of the asset is less than $5,000, the agency transferring will treat the transaction as a disposition, e.g., a donation or scrap, using one of the transaction codes DD1 through DD4, depending on the class of asset. The receiving agency can enter the acquisition by whatever method seems appropriate, using one of the transaction codes A11 - A14 or A16.

 

If the book value of the asset is $5,000 or more, both agencies should contact the DSAHelpline for assistance and have the following information ready:

 

• Contact name and phone number of the transfer out agency.
• Property and component number.
• Name of the receiving agency.
• Date that the transfer process will begin.