Process Group/Policy Details
Subject: Treasury Accounting
Process Group: Bond Issuance and Accounting
Title of Policy: Bond Issuance and Accounting
Effective Date: 07/01/2014
Approved/Revision Date:
Approved by: Robert Jaros
In This Policy
Process Group Description
Bond Issuance and Accounting
The process group Bond Issuance and Accounting provides the ability to record entries for accounting events that originate from the issuance of bonds. This group includes governmental and proprietary activity, as well as the original issuance and refunding issuances.
Rationale or background to policy:
CORE utilizes specific event types to record bond-related activities. In order to provide consistent and accurate accounting across departments, a common policy is required.
Policy Statement:
Departments shall record bond activity in accordance with these policies and procedures within 30 days of closing on the obligation. Additionally, departments shall record all information for short-term tax revenue anticipation notes within CORE for financial statement disclosure. Departments shall record all bond activity entries using the JV1Bond document, except for institutions of higher education.
TA.PO.01.1 Bond Issuance
The accounting transactions for the issuance of bonds differ dependent upon whether bonds are issued by a governmental fund or a proprietary fund (including internal service funds). Procedures included in the recording of bonds are recording the liability, the proceeds, the issuance costs, the bond payments, and year-end entries split between governmental and proprietary activity.
TA PR.01.1 – Record Bond Proceeds and Issuance Costs
Governmental Funds
Event Types XT01, XT14, and XT15 are specific to the issuance of bonds in governmental funds. The posting pair with these event types includes recording of cash for the bond proceeds, recording of cash for any issuance premium proceeds, and recording of the cash outflow for the issuance costs in the governmental fund. For short-term tax revenue anticipation notes (GTRANs and ETRANs), additional information is required when recording the issuance. The extended description field for short-term bonds should include the following information to facilitate financial statement footnote disclosure:
Issuance Name
Issuance Date
Maturity Date
Amount of Issuance
Premium/Discount Amount
Coupon Rate Interest Amount
Net Interest Cost
Net Interest Percentage
Yield Rate
Proprietary Funds
Event Types XT02 and XT18 are specific to the issuance of bonds in proprietary funds. The posting pair with these event types includes recording of cash and bond liability, recording of the increase or decrease in cash for any issuance premium or discount, and recording of the cash outflow for the issuance costs.
TA PR.01.2 – Record Bond Liability
Governmental Funds
Event Type XT16 is also used to record the liability in the General Full Accrual Account Group, Fund 4710, with on offsetting debit to the bond proceeds.
Proprietary Funds
The liability is recorded with the receipt of the proceeds. See TA PR.01.1.
TA PR.01.3 – Record bond principal and interest expense
Governmental Funds
Event Types XT03, XT20, XT21, and XT22 are used to record principal and interest expense with payment to the bond trustee on a JV1Bond document in the governmental fund.
Proprietary Funds
Event Type XT04, XT30, and XT31 are used to record principal and interest expense with payment to the bond trustee on a JV1Bond document in the proprietary fund. This event type assumes that the debt service payment is budgeted in the proprietary fund, which typically occurs as a capital construction appropriation. In proprietary fund accounting there is not an expenditure for principal payments, therefore, the bond principal budgeted expenditure is offset by a nonbudgetary bond payment expenditure credit and reduction in the liability for financial reporting purposes.
TA PR.01.4 – Year-End Bond Entries
Governmental Funds
Event Types are used for year-end activity to accrue interest (and principal expense in the highly unusual instance when funds are transferred irrevocably to the debt service fund for payment of debt within 30 days after fist year end) (Event Type XT28), amortize premium/discount (Event Type XT24), reclassify current and long-term (Event Type XT27), reclassify unspent bond proceeds (Event Type XT25), and reduce the bond liability using a nonbudgetary principal expenditure credit (offset) in the GFAAG.
Proprietary Funds
Event Type XT04 is used for year-end activity to accrue interest (and principal expense in the highly unusual instance when funds are transferred irrevocably to the debt service fund for payment of debt within 30 days after fist year end) (Event Type TBD), amortize premium/discount (Event Type XT33), reclassify current and long-term (Event Type TBD) and reclassify unspent bond proceeds in the proprietary fund (Event Type XT34).