Revenue Bonds

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Revenue Bonds BANs - GAAP Passdown Entries
from CO
December 2008 Version 1.0
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Revenue Bond Passdown Schedule

• The passdown schedules and entries are grouped by
  program (e.g. Union, Housing, Parking)
• Each program has its own schedule and set of
  entries
• Each Schedule is broken down into sections
• Debt rollforward
• Invested in Capital Assets Net Asset category
  entries
• Restricted Debt Service Net Asset category
  entries
• Restricted Capital Projects Net Asset category
  entries
• Unrestricted Net Asset category entries
• Footnote disclosure

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Debt Rollforward

• Outstanding bonds and BANs at the beginning of
  the year by series
• Current year activities (e.g. new issuance, BAN
  rollover, principal payments or BAN payoff, and
  bond defeasance)
• Outstanding bonds and BANs at the end of the year
• Interest expense for the year by series (may be
  used for capitalization of interest cost)
• Accrued interest expense liability at 6/30/CY
• Unamortized net premium/discount or loss at the
  beginning of the year by series
• New premium/discount or loss
• Current year amortization expense
• Unamortized net premium/discount or loss at the
  end of the year

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Passdown Entries

• By net asset categories
• Current year activities (not limited to debt
  rollforward)
• Reversal of prior year accruals
• Reclassification entries

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Invested in Capital Assets, net of Related Debt
Entries SCO Fund 0997 - General Fixed Asset
Group

• Current year principal payment from debt service
  transfers from campus see note (a)
• Reclassify next years principal debt obligation
  from noncurrent to current

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Invested in Capital Assets, net of Related Debt
Entries (contd)

• Record current year amortization expense

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Restricted Expendable Debt Service EntriesSCO
Fund 0578 - Interest Redemption Fund

• Current year interest expense (may be
  capitalizable)
• Current year investment receivable - 4th quarter
  SMIF (reverse in following year)
• Debt service transfers-in from campus see note
  (a)
• Investment income
• Investment income from bond proceeds (may be
  capitalizable)
• Transfer-in of bond proceeds set aside to pay
  future debt services (also called in capitalized
  interest in financing terms)
• Accrued interest expense payable (reverse in
  following year)
• Increase/decrease to investments based on above
  transactions
• Reversal of prior year interest expense accrual

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Restricted Expendable Debt Service Entries
(contd)

• Reversal of prior year investment income accrual
• Reclassify debt service reserve that is
  internally imposed to unrestricted net asset
  category (reverse in following year). Note This
  is only a book entry. The actual reserve is
  still in 0578-Interest and Redemption Fund on the
  rollforward schedule.
• Reversal of prior years debt service reserve
  entry
• Reclassify capitalized interest in excess of next
  years debt service to restricted expendable
  capital projects net asset category (reverse in
  following year). Note This is only a book
  entry. The excess fund is still in 0578-Interest
  and Redemption Fund on the rollforward schedule.

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Restricted Expendable Capital Projects
EntriesSCO Fund 0576 - Dormitory Construction
Fund

• Record new BAN proceeds
• Record BAN rollover (consists of accrued interest
  expense and additional principal)
• Record long-term debt, current from BAN issuance

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Restricted Expendable Capital Projects
EntriesSCO Fund 0576 - Dormitory Construction
Fund (contd)

• Record BAN payoff
• Transfer-out bond proceeds set aside to pay
  future debt services (also called in capitalized
  interest in financing terms). See other side on
  slide 7.
• Record new debt
• Current year investment receivable - 4th quarter
  SMIF (reverse in following year)
• Operation maintenance of plant from bond
  related expenses incurred by the SCO
• Investment income from unexpended bond proceeds
  by project (may be capitalizable)
• Record net premium (consists of bond premium,
  underwriters discount, bond insurance premium,
  and cost of issuance)
• Increase/decrease to investments based on above
  transactions

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Restricted Expendable Capital Projects
EntriesSCO Fund 0576 - Dormitory Construction
Fund (contd)

• Sources and Uses Summary - Bond Issuance

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Restricted Expendable Capital Projects
EntriesSCO Fund 0576 - Dormitory Construction
Fund (contd)

• Reversal of prior year investment income accrual
• Reclassification entry from restricted expendable
  debt service net asset category for capitalized
  interest in excess of next years debt service
  (reverse in following year). Note This is only
  a book entry. The excess fund is still in
  0578-Interest and Redemption Fund on the
  rollforward schedule. See other side on slide 8.

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Unrestricted EntriesSCO Fund 0948 - Trust Fund

• Reclassification entry from restricted expendable
  debt service net asset category for debt service
  reserve that is internally imposed (reverse in
  following year). Note This is only a book entry.
  The actual reserve is still in 0578-Interest and
  Redemption Fund on the rollforward schedule. See
  other side on slide 8.
• Reversal of prior years debt service reserve
  entry. See other side on slide 8.

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Footnote (FN) Disclosure 7 in YES

• FN 7.1 - LT Debt Obligation Detail Passed Down
  from CO
• Agrees to LT Debt outstanding and unamortized
  prem/disc at 6/30/20CY

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Footnote (FN) Disclosure 7 in YES (contd)

• FN 7.3 - LT Debt Obligation Schedule passed down
  from CO
• Agrees to LT Debt at 6/30/20CY

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0576 Investments Held by CO Rollforward

• This schedule should be used as a check figure to
  ensure all entries for all programs have been
  booked and the ending campus investment balance
  agrees to the 0576 rollforward schedule.
• The beginning balance on the rollforward is prior
  years ending investment balance.
• The current year activities are either provided
  in the passdown entries or need to be initiated
  and recorded by the campus as GAAP adjustment or
  reclassification entries.
• Once the current year activities are booked,
  campus should arrive at the ending investment
  balance on the rollforward schedule.
• Like the Note on page 12, the reclassification
  entry is only a book entry and need to be
  manually backed out of the 0576 investment
  balance in order to tieout to the rollforward
  schedule.
• The investment rollforward schedule may be
  expanded by selecting the sign to the left to
  view the activity detail.

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0578 Investments Held by CO Rollforward

• This schedule should be used as a check figure to
  ensure all entries for all programs have been
  booked and the ending campus investment balance
  agrees to the 0578 rollforward schedule.
• The beginning balance on the rollforward is prior
  years ending investment balance.
• The current year activities are all provided in
  the passdown entries.
• Once the current year activities are booked,
  campus should arrive at the ending investment
  balance on the rollforward schedule.
• Per Note on page 8, reclassification entries are
  only book entries and need to be manually added
  back to the 0578 investment balance in order to
  tieout to the rollforward schedule.

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Reporting Investments Held by CO on Note 3.2

• The current portion of the investment should be
  the ending 0578 investment rollforward balance
  less the amount reclassified to 0576.
• The noncurrent restricted portion of the
  investment should be the ending 0576 investment
  rollforward balance plus the amount reclassified
  from 0578.
• Total investments should agree to the sum of 0578
  and 0576 ending investment rollforward balances.
• A summary schedule is provided by the CO
  systemwide reporting as a check figure that the
  balances entered into note 3.2 are as expected.

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