Additional details regarding disgorgement and penalties and the SCA are presented in Note 1.U.. Earmarked, Disgorgement and Penalties, and Non-Entity Funds, and Note 16.. Use of Estimat
Trang 1Financial Statements
Financial Section 65
sheet Also effective in FY 2008, the SEC did not include
receivables for amounts the SEC expects to distribute to
the public or collections it expects to forward to the
public in the Statement of Custodial Activity (SCA) The
SCA only includes collections the SEC anticipates
forwarding to the Treasury’s general fund As the
current presentation refl ects a change from one that
was acceptable to another that is a preferred
presenta-tion, prior period fi nancial statement and related
information was presented as previously reported
Additional details regarding disgorgement and penalties
and the SCA are presented in Note 1.U Disgorgement
and Penalties, Note 12 Earmarked, Disgorgement and
Penalties, and Non-Entity Funds, and Note 16 Custodial
Revenues and Liabilities.
In the SEC’s FY 2007 Performance and Accountability
Report, Note 4 Investments is presented differently
to conform with reporting requirements in OMB
Circular A-136
E Use of Estimates
The preparation of fi nancial statements in conformity
with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets
and liabilities These estimates and assumptions include
the disclosure of contingent assets and liabilities at the
date of the fi nancial statements and the reported
amounts of revenues and expenses during the reporting
period Actual results may differ from those estimates
F Intra- and Inter-Agency Relationships
The SEC does not have transactions among its own
operating units, and therefore, intra-entity eliminations are
not necessary The SEC has certain oversight responsibilities
with respect to the FASB, the Securities Investor Protection
Corporation (SIPC) (refer to Note 11 Commitments and
Contingencies), and PCAOB; however, these entities are not
subject to consolidation
G Fund Accounting Structure
The SEC accounts for fi nancial activities by Treasury Appropriation
Fund Symbol (TAFS), summarized as follows:
• General Fund—Salaries and Expenses (0100 and
X0100) consist of earmarked funds for use in
carry-ing out the SEC’s mission and functions and
revenues collected by the SEC in excess of
appropri-ated funds for FY 2003 through FY 2004 (0100) and
FY 2005 through FY 2008 (X0100) (refer to Note
1.H Earmarked Funds, Note 3 Fund Balance with Treasury, and Note 12 Earmarked, Disgorgement and Penalties, and Non-Entity Funds).
Other Funds:
• Deposit and Suspense Funds (X6563, X6561, F3875, and F3880) carry disgorgement, penalties, and interest collected and held on behalf of harmed investors, registrant monies held temporarily until earned by the SEC, and collections awaiting disposi-tion or reclassifi cadisposi-tion
• Miscellaneous Receipt Accounts (1099 and 3220) hold non-entity receipts and accounts receivable from custodial activities that the SEC cannot deposit into funds under its control These include amounts received pursuant to cases that the SEC will send to the Treasury
The SEC does not have lending or borrowing
authority, except as discussed in Note 11
Commitments and Contingencies The SEC has
custo-dial responsibilities, as described in Note 16 Custocusto-dial
Revenues and Liabilities.
H Earmarked Funds Earmarked funds are fi nanced by specifi cally identifi ed revenues, often supplemented by other fi nancing sources, which remain available over time The SEC collects such funds, which statutes require the SEC to use for desig-nated activities, benefi ts or purposes; and to account for them separately from the government’s general revenues
The SEC accounts for these as offsetting collections and deposits amounts collected in TAFS 0100, Salaries and
Expense as detailed in Note 12 Earmarked, Disgorgement
and Penalties, and Non-Entity Funds.
I Entity/Non-Entity Assets Assets that an agency is authorized to use in its opera-tions are entity assets Assets that an agency holds on behalf of another federal agency or a third party and are not available for the agency’s use are non-entity assets
The SEC’s non-entity assets include the following: (i) disgorgement, penalties, and interest collected or to be collected and held or invested by the SEC pending distribution to harmed investors (disgorgement funds); (ii) custodial accounts receivable; and (iii) excess fi ling fees remitted by registrants (registrant deposits)
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