0101 Overview

This chapter establishes the Department of Veterans Affairs’ (VA) financial policies regarding accounting for assets and distinguishing Federal, non-Federal, intragovernmental, and other than intragovernmental assets.

Key points covered in this chapter:

• VA will comply with Office of Management and Budget (OMB) Circular A-136, Statement of Federal Financial Accounting Standard (SFFAS) 1,  SFFAS 31, and Treasury Financial Manual (TFM) Volume I to record and report assets;
• Entity and non-entity assets will be accounted for separately, but combined for presentation purposes in the balance sheet; and
• Intragovernmental and other than intragovernmental (public) assets will be accounted for and reported separately.

0102 Revisions

	Section	Revision	Office	Reason for Change	Effective Date
	Various	Reformatted to new policy format and complete full review	OFP	To properly reflect VA’s current guidance for accounting and recognition of assets	August 2024
	010501	Listed the six selected assets discussed in SFFAS 1	OFP	To provide additional detail of scope of SFFAS 1	August 2024
	010504	Added that VA must record a liability equal to non-entity assets	OFP	To ensure compliance with SFFAS 1	August 2024
	Appendix A	Removed illustration of balance sheet and replaced with listing of Previous Policy Revisions	OFP	Refer to OMB A-136 for illustration of balance sheet reporting	August 2024
	Appendix B	Removed from chapter	OFP	Refer to AFR for illustration of note disclosure	August 2024

0103 Definitions

Assets – Tangible or intangible items owned by the Federal Government which have probable future economic benefits controlled by a Federal government entity. An asset has two essential characteristics: (1) it embodies economic benefits or services that can be used in the future and (2) VA controls access to the economic benefits and therefore can regulate their use.

Entity – A unit within the Federal Government such as a department, agency, bureau, or program, for which a set of financial statements would be prepared. Entity also encompasses a group of related or unrelated commercial functions, revolving funds, trust funds, and/or other accounts for which financial statements will be prepared in accordance with OMB annual guidance on Form and Content of Financial Statements.

Fiduciary – An entity that holds assets in trust for another entity.

Fiduciary Activities –Federal Government activities that relate to the collection or receipt, and the subsequent management, protection, accounting, investment and disposition of cash or other assets in which non-Federal individuals or entities (“non-Federal parties”) have an ownership interest that the Federal Government must uphold.

Other than Intragovernmental (Public) Assets – Assets arising from VA’s claims against non-Federal parties.

Intangible Assets – Assets having no physical existence such as trademarks, copyrights, patents, loans, notes, and other debt instruments, lease agreements, stock, and other instruments of property ownership.

Intragovernmental Assets – Assets arising from VA’s claims against Federal parties.

Non-entity Asset – Assets held by an entity that are not available for the entity to use in its operations. Assets held in a fiduciary capacity for another entity.

Other Assets – A consolidated category of assets that are immaterial to the entity and do not warrant separate reporting.

Tangible Assets – Property that has a physical presence; including both real and personal property (Statement of Federal Financial Accounting Standards (SFFAS) 3, considers inventory and operating materials to be personal property).

0104 Roles and Responsibilities

Administration and Staff Office Chief Financial Officers (CFOs) and Fiscal Staff are primarily responsible for the appropriate recording and reporting of assets under their jurisdictions.

Financial Services Center (FSC) is responsible for providing support for the accounting and reporting of VA’s assets, including posting, reconciling, and recording asset transactions and events, as requested.

0105 Policies

010501 General Policies

1. VA will comply with guidance in SFFAS 1, which requires that all selected assets (e.g., cash, fund balance with Treasury, accounts receivable, interest receivable, advances, repayments, and investments in Treasury securities) be reported separately as intragovernmental or other than intragovernmental (public) assets.
2. VA will comply with OMB Circular A-136 and TFM Volume 1 when recording and reporting assets.
3. In accordance with SFFAS 31, VA will provide a note disclosure on fiduciary assets contained in VA’s financial statements. Fiduciary assets and liabilities should not be recognized on the balance sheet of a Federal entity.
4. Additional information related to specific categories of assets can be found in the subsequent chapters of Volume V, Assets.

010502 Recording Intragovernmental and Other Than Intragovernmental (Public) Assets

1. VA will use accounting attributes to identify intragovernmental assets from other than intragovernmental (public) assets when recording accounting transactions.
2. VA will maintain adequate documentation to support intragovernmental and other than intragovernmental (public) asset transactions. Documentation must be available for review by VA management, auditors, and others with oversight responsibilities.

010503 Recording Entity and Non-Entity Assets

1. VA will use accounting attributes to identify entity and non-entity assets when recording accounting transactions so that they can be appropriately reported in the financial statements.
2. When non-entity assets are recorded in the financial system as an asset, a corresponding liability must also be recorded.
3. VA will distinguish fiduciary assets from all other non-entity assets in accordance with SFFAS 31.

010504 Reporting of Assets

1. In accordance with OMB Circular A-136, VA will report tangible and intangible assets in its financial statements and accompanying note disclosures.
2. In accordance with OMB Circular A-136, VA will segregate intragovernmental and other than intragovernmental (public) assets on the balance sheet.
3. In accordance with SFFAS 1, VA will report in its financial statements and related disclosures selected assets such as: cash, fund balance with Treasury, accounts receivable, interest receivable, advances and repayments, and investments in Treasury securities separately as intragovernmental or other than intragovernmental (public) assets.
4. When non-entity assets are presented on the balance sheet, a corresponding liability must also be presented in an equal amount.
5. VA will detail entity and non-entity assets in a footnote to its financial statements.
6. Entity assets and non-entity assets under an entity’s custody or management will be reported in VA’s financial statements in accordance with SFFAS 1.
7. In accordance with SFFAS 31, non-entity assets meeting the definition of fiduciary assets, which should not be recognized on the balance sheet, will be disclosed in the notes to the financial statements. The Disclosure will provide at a minimum the following information about VA’s fiduciary activities:
   • An explanation of the nature of the fiduciary relationship,
   • A schedule of fiduciary net assets, and;
   • A schedule of fiduciary activity.

0106 Authorities and References

• OMB Circular A-136, Financial Reporting Requirements – Revised
• Federal Accounting Standards Advisory Board (FASAB) Handbook by Chapter
• SFFAS 1, Accounting for Selected Assets and Liabilities
• SFFAS 31, Accounting for Fiduciary Activities
• Treasury Financial Manual – Volume I: Federal Agencies

0107 Rescissions

Volume V, Chapter 1 – Recognition and Accounting for Assets, dated June 26, 2019

Appendix A: Previous Policy Revisions

Section	Revision	Office	Reason for Change	Effective Date
Various	Reformatted to new policy format and completed five-year update	OFP	Reorganized chapter layout	March 2019
0104 Roles and Responsibilities	Updated office names to current nomenclature	OFP	Name change	March 2019
0105 Policies	Updated policy statements	OFP	Properly reflect VA’s current accounting and recognition of assets	March 2019