3 Accounting
3.9 Interfund Activities
3.9.2 Property Transfers
3.9.2.10 If the contributed nonmonetary assets were originally acquired with restricted resources, the government must monitor their usage and disposal to assure that one fund does not benefit from another (RCW 43.09.210). If management's intentions are to repay the cash transferred to the internal service fund, the transfer should be recorded as an interfund loan in the appropriate funds (see BARS 3.9.1, Interfund Loans). Transfers of assets within the government must be reported at book value. It cannot result in an overall increase in net position/fund balance within the government.
Transfer from governmental fund to proprietary fund
The governmental fund does not have a journal entry since capital assets are not reported in the governmental fund financial statements.
The proprietary fund reports a capital contribution:
|
Account |
Debit |
Credit |
|
Capital assets |
$20,000 |
|
|
374.07.00 Capital contribution |
|
$20,000 |
On the government-wide financial statements, this transaction will be reclassified to a transfer from governmental activities to business-type activities.
Transfer from proprietary fund to proprietary fund
The transferring fund reports a nonoperating expense
|
Account |
Debit |
Credit |
|
373.00.00 Loss on disposal of capital asset |
$20,000 |
|
|
Capital assets |
|
$20,000 |
The receiving fund reports a capital contribution. This is the same journal entry as when the proprietary fund receives and asset from a governmental fund.
Transfer from governmental fund to governmental fund
The transfer of general capital assets (originally purchased with unrestricted resources) between two governmental funds of the same government should be accounted for merely as a change in location and/or custodian because capital assets are not reported in governmental funds. If the resources involved with the original purchase were restricted, the capital assets must be paid for by the receiving fund.