Agriculture Financial Accounting Standards Manual

AGRICULTURE FINANCIAL STANDARDS MANUAL Office of the Chief Financial Officer Credit, Travel, and Accounting Policy Division Revised May 2004 May 2004 Agriculture Financial Standards Manual ______________________________________________________________________________ I May 2004 Agriculture Financial Standards Manual ______________________________________________________________________________ II Summary of Changes Section Date Item Changed Change Authoritative Sources FASAB, SFFAC, SFFAS, and OMB Circulars Nov 03 Added SFFAC 4, Intended Target Audience and Qualitative Characteristics for the Consolidated Financial Report of the United States Government “ “ Added SFFAS 23, Eliminating the Category National Defense Property, Plant, and Equipment (not applicable to USDA operations) “ “ Added SFFAS 24, Selected Standards For The Consolidated Report of the United States Government “ “ Added SFFAS 25, Reclassification of Stewardship Responsibilities and Eliminating the Current

Services Assessment “ “ OMB Circular A-125, Prompt Payment Rescinded and replaced by Prompt Pay regulations at 5 CFR Part 1315 Internal Use Software Definition of Software “ Added numerals 1-3 to the definition of software (1) off-the-shelf from vendors, (2) developed by contractors or (3) developed internally. Internal Use Software Capitalized Cost “ Deleted Preliminary Design Phase and the from Capitalized Cost description Now reads … full cost incurred during the Software Development Phase Internal Use Software Capitalization Threshold “ Added Effective FY 2001 … with an estimated service life of 2 years or more. Internal Use Software Amortization/Useful Life “ Deleted The Office of the CIO should have responsibility for determining the estimated useful life of the software. Program offices should coordinate with the OCIO regarding the estimated useful life of software. Internal Use Software Amortization/Useful Life “ Deleted Amortization of internal use software will not begin until the Software Development Phase is completed. Amortization of internal use software begins after the Software Development Stage is completed. Upon completion, these costs will be transferred from USSGL account 1832, “Internal-Use Software in Development, to USSGL account, 1830, “Internal-Use Software.” Internal Use Software Models/Components “ Deleted In terms of amortization Internal Use Software Enhancements “ Deleted If … are … they …. Costs incurred which extend the functionality and the useful life of internal use software should be capitalized. Internal Use Software “ Deleted The amortization of these costs shall not exceed 5 years. May 2004 Agriculture Financial Standards Manual ______________________________________________________________________________ III Section Date Item Changed Change USDA Directives Mar-04 DR2200-002, Capitalization/Depreciation Real/Personal Property DR2200-002, Property, Plant and Equipment Internal Use Software May-04 Added Title: Recognition, Measurement, and Disclosure Internal Use Software “ Added titles and discussion of the following topics Data Conversion Costs Cutoff for Capitalization Integrated Software Bundled Products and Services Internal Use Software “ Deleted Training. Initial training should be capitalized. All recurring training must be expensed as incurred. Training costs should include personnel labor costs, facilities, and supplies and materials. Each of the costs are in separate cost pools and therefore, need to be appropriately coded in order to capture the costs as capitalized cost or expense. Training. Training costs must be recognized as expense as incurred. Even though these may be costs which are associated with the internal development or acquisition of software for internal use, under GAAP those costs relate to the period in...

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