Handbooks

Handbook F-23: Miscellaneous Revisions

Effective immediately, Handbook F-23, Accounting Pol­icy Reference, is revised to reflect current Postal Service™ policy.

Handbook F-23, Accounting Policy Reference

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2 General Policies

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2-6 Financial Reporting Hierarchies

2-6.1 Charts of Accounts

[Revise text to read as follows:]

The Postal Service maintains one distinct chart of accounts. The chart is divided into two types as defined below: the Legacy Chart of Accounts/Account Number Control Master (ANCM) and the Oracle General Ledger (OGL) Natural Accounts.

2-6.1.1 Definitions

[Revise text to read as follows:]

The Legacy Chart of Accounts is an 8-digit account num­bering system, consisting of a 5-digit primary account code and a 3-digit subaccount code, which is documented in the online Account Number Control Master (ANCM). The 8-digit accounts are used primarily in subledger systems that feed into the general ledger and flow into the Accounting Data Mart (ADM).

The Oracle General Ledger (OGL) Natural Accounts is a 5-digit natural account numbering system, which consoli­dates the subaccounts to the 5-digit level. The 8-digit Leg­acy Chart of Accounts is mapped to the OGL Natural Accounts as part of the general ledger data accumulation process.

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2-8 Financial Reporting

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2-8.3 Liquidation of Accruals

The Postal Service liquidates accruals as follows:

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[Revise item b to read as follows:]

b. Accruals for a fiscal year close that are not liquidated by the following November close are reversed as a credit to a servicewide finance number.

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3 Assets

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3-4 Advances and Prepayments

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[Revise the third paragraph to read as follows:]

Refer to Management Instruction FM-610-2010-2, Advance Payments, for information on specific approval levels required related to advance payments.

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3-7 Property and Equipment

3-7.1 General Policy

[Revise text to read as follows:]

The Postal Service has five major categories of property and equipment that it discloses in its financial statements:

a. Buildings.

b. Equipment.

c. Land.

d. Leasehold improvements.

e. Construction in progress.

These categories of assets are presented individually in the balance sheet together with a total allowance for deprecia­tion and amortization. The Postal Service maintains detail property and equipment records in the Property and Equip­ment Accounting System (PEAS).

In accordance with GAAP, the Postal Service records assets as follows:

 

This Item	Is
Property and equipment assets	Recorded at what it costs to acquire the assets, including the interest paid on any borrowings used for the construction of major capital additions.
Depreciation of buildings and equipment	Recorded over the estimated useful life, which ranges from 3 to 40 years (with limited exceptions for property of historical value, etc.) using the straight-line method.
Leasehold improvements	Amortized over the period of the lease or the useful life of the improvement, whichever time is shorter.
Repair and maintenance costs	Expensed as incurred.

3-7.2 Specific Policies

3-7.2.1 Buildings

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3-7.2.1.3 Depreciation

[Revise text to read as follows:]

The Postal Service depreciates most buildings over a ser­vice life of 40 years. Trailer units and modular buildings have a service life of 10 years. Depreciation starts the month following capitalization and stops when the building is fully depreciated. If the building is disposed of before becoming fully depreciated, depreciation ceases in the month in which the disposal action is recorded in the gen­eral ledger. Building improvements are depreciated over the remaining service life of the improved building. The improvement cost is added to the undepreciated cost of the building. The depreciation pertaining to the improve­ment starts the month following capitalization of the improvement cost. Improvements made in the last year of depreciation or when a building is fully depreciated are depreciated over 1 year.

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3-8 Impairment of Long-Lived Assets

[Revise the first paragraph to read as follows:]

Quarterly, the Postal Service evaluates the events and cir­cumstances that may indicate that it is probable that the value of long-lived assets recorded on the balance sheet are impaired as per the guidance within FASB ASC 360-10-35, Property, Plant and Equipment, Overall, Subsequent Measurement. The Postal Service reduces the value of impaired assets to fair value.

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We will incorporate these revisions into the next printed version of Handbook F-23 and into the next online update, available on the Postal Service PolicyNet website:

n Go to http://blue.usps.gov.

n In the left-hand column under “Essential Links”, click PolicyNet.

n Click HBKs.

(The direct URL for the Postal Service PolicyNet website is http://blue.usps.gov/cpim.)

— Field and International Accounting,
Controller, 1-13-11