ACCOUNTING MANUAL FOR FEDERAL CREDIT …

1 ACCOUNTING MANUAL FOR FEDERAL CREDIT UNIONS TOPICAL INDEX ACCURATE AND CURRENT RECORDS ESSENTIAL 200-3 BASIC ACCOUNTING RECORDS 200-3 Double-Entry system 200-3 Types Of Accounts 200-4 PURPOSE OF RECORDS 200-3 ACCRUED INTEREST RECEIVABLE 300-99 ACCRUED INTEREST ON INVESTMENTS 300-102 Accrued Interest On Investments 300-103 Purchased Accrued Interest Receivable 300-102 ACCRUED INTEREST ON LOANS 300-99 Sample Computations 300-101 ACCOUNTING MANUAL FOR FEDERAL CREDIT UNIONS 100-1 ELIMINATION OF THE RECOMMENDED CREDIT UNION CHART OF ACCOUNTS 100-2 LOOSE-LEAF system - PERIODIC REVISIONS 100-2 NEW REVISED EDITION 100-1 PURPOSE AND USE AS A PRESCRIBED system 100-1 ACCOUNTING PRINCIPLES AND STANDARDS -- PURPOSE AND SCOPE 100-2 ACCOUNTING PROFESSION PRONOUNCEMENTS 200-7 HIERARCHY OF GAAP STANDARDS 200-8 HIERARCHY OF REGULATIONS 200-8 ACCRUED EXPENSES AND OTHER LIABILITIES 400-40 ACCOUNTS PAYABLE 400-40 Accounts Payable 400-40 Accounts Payable-Check Transmittal Service 400-43 Accounts Payable-Drafts Authorized 400-44 Accounts Payable-Installment Payment on US Bonds 400-44 Accounts Payable-Traveler s Checks and Money Orders Sold 400-41 Accounts Payable-Undistributed Payments 400-42 Accounts Payable-Undistributed Payroll Deductions or Allotments 400-43 Accounts Savings Bond Remittances 400-45 FEDERAL Unemployment Compensation Tax Payable and State Unemployment Compensation Tax Payable 400-48 Notes Payable Commitment Fees 400-46

2 Topical Index Section-Page No. 2 Other Taxes Payable 400-49 Social Security Taxes Payable 400-47 Taxes Payable 400-46 ACCRUED EXPENSES 400-50 Accrued ACCOUNTING Service Cost 400-50 Accrued Cost of Space Occupied 400-50 Accrued Dividends Payable 400-50 Accrued Employee Benefits 400-50 Accrued Salaries 400-50 Other Accrued Expenses 400-51 BORROWERS TAXES AND INSURANCE ESCROWS 400-51 Escrow Accounts 400-51 DEFERRED CREDITS 400-54 Deferred Credits-Insurance Premium Rebate 400-55 Deferred Credits-Insurance Premium Stabilization Reserve 400-57 Deferred Credits-Net Commitment Fees (Costs)-Lines of Credits to Members 400-59 Deferred Credits-Net Commitment Fees (Costs)-Loans to Members 400-60 Deferred Credits-Net Origination Fees (Costs)

3 -Home Equity Lines of CREDIT 400-59 Deferred Credits-Net Origination Fees (Costs)-Lines of CREDIT to Members 400-58 Other Deferred Credits 400-58 Unamortized Discount on Sale of Assets 400-56 Unearned Interest on Loans 400-54 OTHER LIABILITIES 400-52 Liability Under Pension Cost 400-52 Other Liabilities 400-52 Subordinated CDCU Debt 400-52 Undisbursed Loan Proceeds 400-52 SUSPENSE ACCOUNTS 400-60 Unapplied Data Processing Exceptions 400-60 Unapplied Data Processing Exceptions (Disbursements) 400-61 Unapplied Data Processing Exceptions (Receipts) 400-60 ACCRUED INTEREST PAYABLE 400-8 Accrued Interest Payable (on Borrowed Funds) 400-39 Alternative Interest Refund Procedures 400-38 Dividends Payable 400-9 Interest Refunds Payable 400-37 BASIC CONCEPTS AND GENERAL PRINCIPLES 200-5 ACCOUNTING AND DIVIDEND PERIODS 200-7 ACCOUNTING BASIS 200-7 Topical Index Section-Page No.

4 3 COMPLETE RECORDING OF INCOME AND EXPENSES 200-7 CONSERVATIVE ACCOUNTING 200-6 CONSISTENCY IN ACCOUNTING FROM PERIOD TO PERIOD 200-6 FISCAL YEAR 200-7 GOING CONCERN CONCEPT 200-5 INTERNAL CONTROL 200-6 MATERIALITY 200-6 MONETARY BASIS FOR ACCOUNTING 200-6 SEPARATE ENTERPRISE 200-5 TIMELY RECOGNITION IN ACCOUNTING RECORDS 200-6 BORROWED FUNDS 400-5 CERTIFICATES OF INDEBTEDNESS 400-6 FEDERAL FUNDS PAYABLE 400-8 FEDERAL Funds Purchased 400-8 LETTERS OF CREDIT 400-8 MORTGAGES PAYABLE 400-7 Mortgage Notes Payable 400-7 NOTES PAYABLE 400-5 Notes Payable-Other 400-5 OBLIGATIONS UNDER CAPITAL LEASES 400-7 PROMISSORY NOTES 400-6 REVERSE-REPURCHASE AGREEEMENTS 400-8 BRIEF OUTLINE OF THE PRESCRIBED ACCOUNTING system 200-4 ACCRUAL BASIS 200-4 MODIFIED CASH BASIS 200-4 THE BASIC CREDIT UNION ACCOUNTING system DESCRIBED 200-4 Records Of Original Entry And Record Of Final Entry 200-5 CASH AND CASH EQUIVALENTS 300-3 CASH EQUIVALENTS 300-27 All Other Investments 300-28 Certificates Of Deposit 300-28 Commercial Paper 300-27 FEDERAL Funds Sold 300-27 Shares/Deposits/Certificates In Commercial Banks, S&L s, Savings Banks 300-28 Shares/Deposits/Certificates In Corporate CREDIT Unions 300-28 Traveler s Checks/Money Orders 300-28 Treasury Bills 300-27 CASH ON DEPOSIT 300-3 Topical Index Section-Page No.

5 4 Balances On Deposit 300-3 Deposits In Transit 300-3 Monetary Control Reserve Deposits 300-3 CASH ON HAND 300-3 Change Fund 300-3 Petty Cash 300-6 GENERAL CASH HANDLING AND ACCOUNTING PROCEDURES 300-7 ACCOUNTING For Cash Receipts 300-7 ACCOUNTING For Disbursements 300-8 Balancing Teller s Cash Receipts And Disbursements Using Online Computer Terminals 300-15 Balancing Out Teller s Funds 300-11 Bond Sale Transactions/Records 300-22 Cash Received From Sales Of Savings Bonds 300-23 Check Endorsements 300-13 Check Protectors 300-19 Check Signing Machines 300-18 Check Writing Machines 300-19 Compensation For Services 300-27 Coupon Book Plans For Loan Repayments 300-15 Depositing Cash 300-10 Disbursement of Cash By Check Or Bank Charges 300-11 Disbursements 300-24 Disbursing Share Withdrawals And Loans In Cash 300-17 Installment Payments Received Over The Counter 300-24 Liability Account Liability In Connection With Loan Drafts 300-20 Listed Check Register 300-16 Loan Drafts 300-19 Mail Receipts 300-14 Member s Check And Drafts Returned 300-9 Payment By Check 300-25 Payment By Share CREDIT 300-25 Payment In Cash 300-26 Payments Received 300-23 Posting To General Ledger 300-10 Procedures For Cash Disbursements/Check Register 300-16 Receipts And Disbursements Using Automatic Transfer Accounts And Now Accounts 300-15 Reconciling The Cash On Hand 300-13 Recording Payment Data 300-26 Records In Connection With Loan Draft Topical Index Section-Page No.

6 5 Procedures 300-20 Records Of Installment Payments 300-24 Responsibility For Funds On Hand To Meet Loan Draft Obligations 300-21 Sale And Redemption Of Savings Bonds 300-21 Savings Bond Redemption Transactions 300-25 Shipment Of Paid Bonds 300-26 Subsidiary Ledgers 300-25 Total Payment Vouchers 300-13 Voucher Check Register 300-16 COMMITMENTS AND CONTINGENT LIABILITIES 400-62 Accrued Loss Contingencies 400-62 EXTRAORDINARY GAINS AND LOSSES 600-11 FINANCIAL STATEMENTS 200-17 FULL AND FAIR DISCLOSURE REQUIRED 200-20 FULL AND FAIR DISCLOSURE DEFINED 200-20 OPTIONAL STATEMENTS 200-19 Statement Of Cash Flows 200-19 Statement Of Member s Equity (Including Other Comprehensive Income 200-19 PURPOSE 200-17 REQUIRED CERTIFICATION 200-20 REQUIRED STATEMENTS 200-17 Disclosures About Fair Values Of Financial Instruments 200-18 Notes To Financial Statements 200-18 Statement Of Financial Condition 200-18 Statement Of Income 200-18 STATEMENT OF FINANCIAL CONDITION 900-3 Figure 9-1 900-4 Figure 9-2 900-5 STATEMENT OF INCOME 900-6 Classifying Outstanding Loans 900-6 Miscellaneous Information 900-6 Other Loan Information 900-6 STATEMENT OF CHANGES IN MEMBERS EQUITY (EXCLUDING SHARES) 900-8 STATEMENT OF COMPREHENSIVE INCOME 900-8 Figure 9-4 900-9 Figure 9-4a 900-10 SUPPORTING SCHEDULES FOR FINANCIAL STATEMENTS 900-6 Figure 9-3 900-7 Topical Index Section-Page No.)

7 6 INSTRUCTIONS FOR PREPARING REQUIRED FINANCIAL STATEMENTS 900-11 NOTES TO THE FINANCIAL STATEMENTS 900-19 Illustration Of The Use Of Notes To The Financial Statements 900-20 Figure 9-5a 900-21 Figure 9-5b 900-22 Figure 9-5c 900-23 Figure 9-5d 900-24 Statement Of Cash Flows 900-19 GENERAL LEDGER, SUBSIDIARY LEDGERS, AND ACCOUNT RECONCILIATIONS 200-8 ACCOUNT RECONCILIATIONS 200-9 CHART OF ACCOUNTS 200-8 GENERAL LEDGER 200-9 SUBSIDIARY LEDGERS 200-9 GENERAL RULES FOR RECORDING EXPENSES 700-1 OPERATING EXPENSES (GL CONTROL ACCOUNT) 700-1 Approval Of Expenses 700-1 Expense Ledger 700-3 INTEREST EXPENSE 700-5 BORROWED FUNDS 700-6 Commitment Fees On Borrowed Money 700-7 Interest On Borrowed Money 700-6 Unexercised Commitment Fees 700-6 MEMBERS SHARES AND SAVINGS ACCOUNTS 700-5 Dividend Expenses 700-5 Interest On Deposits 700-6 INTEREST INCOME 600-1 INVESTMENTS 600-4 Interest On Securities Available For Sale 600-4 Interest On Securities Held To Maturity 600-5 Interest On Trading Securities 600-4 LOANS RECEIVABLE 600-1 Interest On Loans 600-1 Interest Refunds 600-2 OTHER INTEREST INCOME 600-5 Interest On Cash And Cash Equivalents 600-5 Interest On Deposits & Certificates Of Corporate CREDIT Unions 600-5 Interest On Deposits In

8 Commercial Banks, S&Ls and Savings Banks 600-5 Income From CUSO 600-5 Income From Other Investments 600-5 Topical Index Section-Page No. 7 INVESTMENTS 300-30 OTHER SECURITY CONSIDERATIONS 300-42 Definitions 300-43 Examples Of Transactions Involving Securities 300-44 Impairment Of Securities 300-43 Transfers Between Categories 300-42 OTHER INVESTMENT ACTIVITIES 300-46 Deposits In Commercial Banks, S&Ls, Savings Banks 300-46 Deposits In Corporate CREDIT Unions 300-47 PERMISSIBLE INVESTMENT ACTIVITIES AND TRANSACTIONS SUBJECT TO SPECIFIED CONDITIONS 300-47 ACCOUNTING For Mutual Funds 300-51 ACCOUNTING For Unit Investment Trusts 300-52 Collateralized Mortgage Obligations (CMOs) 300-49 Investment In The Central Liquidity Facility (CLF)

9 300-50 Mortgage Pass-Through Securities 300-47 Pair-Off Transaction 300-47 Put Options 300-52 Zero Coupon Securities 300-50 SECURITIES 300-30 Securities Available-For-Sale 300-32 Securities Held-To-Maturity 300-36 Trading Securities 300-31 OTHER INVESTMENT CONSIDERATIONS 300-54 Authorized Broker/Dealer 300-57 Internal Controls 300-57 Investment Trading Policies 300-54 Periodic Review Policy 300-57 Reporting Requirements 300-57 Responsibility 300-55 Safekeeping 300-57 Special Considerations 300-56 Surety Aspects 300-57 UNAUTHORIZED INVESTMENT TRANSACTIONS AND ACTIVITIES 300-53 Adjusted Trading 300-53 Stripped Mortgage-Backed Securities (IO s/PO s) 300-54 Yield Maintenance Contract 300-54 Zero Coupon Securities 300-54 LOANS HELD FOR SALE 300-60 LOANS RECEIVABLE 300-60 ALLOWANCE FOR LOAN LOSSES 300-77 ALLL Questions And Answers 300-91-95 Topical Index Section-Page No.

10 8 Policy 300-78 LOANS-COLLATERAL IN PROCESS OF LIQUIDATION 300-64 LOANS RECEVABLE BY TYPE 300-61 Agriculture Loans 300-61 Commercial Loans 300-61 Consumer Loans 300-61 Home Equity Loans 300-62 Other Member Loans 300-62 METHODS OF CALCULATING INTEREST 300-67 Actuarial Method 300-67 Assessment Of Late Charges 300-69 Capitalizing Delinquent Interest 300-71 Combination Restructuring 300-71 Interest Rates In Relation To Different Classification Of Loans 300-67 Legal Fees And Other direct Costs Of Restructuring 300-72 Level Payment 300-67 Modification Of Terms 300-70 Principal Payment Plus Interest 300-67 Repayment Plans 300-68 Rule Of 78 300-67 Transfer Of Assets In Settlement Of The Debt 300-70 Troubled Debt Restructuring 300-69 United States Rule-Simple Interest 300-67 When A Loan Is Deferred 300-69 When A Loan Is Extended 300-69 When A Loan Is Refinanc