(Last Modified on February 25, 2016)

USG presents the Statement of Net Position in a classified format to distinguish between current and noncurrent assets and liabilities in accordance with GASB Statement No. 34.

Assets

The term current assets is used to designate cash and other assets or resources commonly identified as those that are reasonably expected to be realized in cash or sold or consumed within a year. Therefore, current assets generally include such resources as (a) cash available for current operations and items that are the equivalent of cash; (b) inventories of merchandise and operating supplies; (c) trade accounts, notes, and acceptances receivable; (d) receivables from other governments, vendors, customers, beneficiaries, and employees, if collectible within a year; (e) installment or accounts and notes receivable if they conform generally to normal trade practices and terms within the business-type activity; (f) marketable securities representing the investment of cash available for current operations; and (g) prepayments such as insurance, interest, rents, unused royalties, current paid advertising service not yet received, and operating supplies. Prepayments are not current assets in the sense that they will be converted into cash but in the sense that, if not paid in advance, they would require the use of current assets within a year.

Noncurrent asset classification includes resources such as (a) cash and claims to cash that are restricted as to withdrawal or use for other than current operations, that are designated for disbursement in the acquisition or construction of noncurrent assets, or that are segregated for the liquidation of long-term debts; (b) receivables arising from unusual transactions (such as the sale of capital assets) that are not expected to be collected within 12 months; (c) cash surrender value of life insurance policies; (d) land and other natural resources; and (e) depreciable assets.

Unearned discounts (other than cash or quantity discounts), finance charges, and interest included in the face amount of receivables are shown as a deduction from the related receivables.

Asset valuation allowances, such as uncollectible receivables, are deducted from the assets or groups of assets to which the allowances relate, with appropriate disclosure.

Liabilities

The term current liabilities is used principally to designate obligations whose liquidation is reasonably expected to require the use of existing resources properly classifiable as current assets, or the creation of other current liabilities. As a category in the Statement of Net Position, the classification is intended to include obligations for items that have entered into the operating cycle, such as payables incurred in the acquisition of materials and supplies to be used in providing services; collections received in advance of the performance of services; and debts that arise from operations directly related to the operating cycle, such as accruals for wages, salaries, commissions, rentals, and royalties. Other liabilities whose regular and ordinary liquidation is expected to occur within one year also are intended for inclusion, such as short-term debts arising from the acquisition of capital assets, serial maturities of long-term obligations, amounts required to be expended within one year under sinking fund provisions, and certain agency obligations arising from the collection or acceptance of cash or other assets for the account of third parties. The current liability classification also is intended to include obligations that, by their terms, are due on demand or will be due on demand within one year from the date of the financial statements, even though liquidation may not be expected within that period.

Noncurrent liabilities include debts to be liquidated by resources that have been accumulated in accounts of a type not properly classified as current assets, or long-term obligations incurred to provide increased amounts of working capital for long periods.