Department of Defense Agency Financial Report 2007
Section 2: Financial Information
The Department’s policy is to allocate supported undistributed disbursements and collections between federal and nonfederal
categories based on the percentage of distributed federal and nonfederal accounts payable and accounts receivable.
Unsupported undistributed disbursements are recorded in accounts payable. Unsupported undistributed collections are
recorded in other liabilities.
1.Z. Significant Events
In FY 2007 the Department made several modifications to its financial reports and notes that had significant and pervasive
effects. These changes are summarized below:
In response to updated reporting requirements from OMB, the Department began reporting in its basic financial statements
all activity for the programs it administers on behalf of the Executive Office of the President including the Foreign Military
Sales Program (FMS). Previously, the Department reported these programs as “Other Accompanying Information” in its
Performance and Accountability Report.
Prior to FY 2007, the Department had reported the current year changes only in undelivered orders, contract authority,
collections, and disbursements for FMS. Based on changes to accounting and reporting methodologies, the Department
now correctly reflects undelivered orders, contract authority, and Fund Balance with Treasury (FBWT) for FMS in its financial
statements and notes with cumulative-from-inception balances.
In addition, the Department no longer reports FMS undelivered orders and FBWT in the Statement of Custodial Activity
(SCA). The Department’s remaining custodial activity is immaterial and incidental to its primary mission. Therefore,
the Department is no longer producing a SCA. Note 22 has been renamed and revised to report “Incidental Custodial
Collections.”
In accordance with updated reporting requirements in OMB Circular A-136, the Department eliminated the Statement of
Financing and began presenting the information formerly contained in the Statement in Note 21 “Reconciliation of Net Cost
of Operations to Budget.”
Note 2. Nonentity Assets
As of September 30
2007
2006 Restated
(amounts in millions)
Intragovernmental Assets
Fund Balance with Treasury
$
9,926.3
$
2,896.6
Accounts Receivable
0.9
11.6
Total Intragovernmental Assets
9,927.2
2,908.2
Nonfederal Assets
Cash and Other Monetary Assets
14,879.6
2,085.2
Accounts Receivable
5,162.9
5,486.7
Other Assets
9,386.9
196.8
Total Nonfederal Assets
29,429.4
7,768.7
Total Nonentity Assets
39,356.6
10,676.9
Total Entity Assets
1,466,988.9
1,361,961.0
Total Assets
$
1,506,345.5
$
1,372,637.9
Nonentity assets are assets for which the Department maintains stewardship accountability and responsibility to report, but
are not available for the Department’s operations.
Nonentity Fund Balance with Treasury is comprised of deposit funds, seized Iraqi cash, the Development Fund for Iraq (DFI),
and advances from foreign governments for Foreign Military Sales Trust Funds (FMSTF) for the purchase of defense articles