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2016 Financial Report of the United States Government


Financial Statements of the United States Government for the Years Ended September 30, 2016, and 2015

Statements of Operations and Changes in Net Position

These statements report the results of Government operations, net operating costs, which include the results of operations for funds from dedicated collections. They include non-exchange revenues, which are generated from transactions that do not require a Government entity to give value directly in exchange for the inflow of resources. The Government does not “earn” the non-exchange revenue. These are generated principally by the Government’s sovereign power to tax, levy duties, and assess fines and penalties. These statements also include the net cost reported in the Statement of Net Cost. They further include certain adjustments and unreconciled transactions that affect the net position.

Revenue

Inflows of resources to the government that the government demands or that it receives by donations are identified as non-exchange revenue. The inflows that it demands include individual income tax and tax withholdings, excise taxes, corporation income taxes, unemployment taxes, custom duties, and estate and gift taxes. The non-exchange revenue is recognized when collected and adjusted for the change in net measurable and legally collectable amounts receivable.

Individual income tax and tax withholdings include Federal Insurance Contributions Act (FICA)/Self-Employment Contributions Act (SECA) taxes and other taxes.

Excise taxes consist of taxes collected for various items, such as airline tickets, gasoline products, distilled spirits and imported liquor, tobacco, firearms, and other items.

Other taxes and receipts include Federal Reserve Banks (FRBs) earnings, tax related fines, penalties and interest, and railroad retirement taxes.

Miscellaneous earned revenues consist of earned revenues received from the public with virtually no associated cost. These revenues include rents and royalties on the Outer Continental Shelf Lands resulting from the leasing and development of mineral resources on public lands.

Generally, funds from dedicated collections are financed by specifically identified revenues, provided to the government by non-federal sources, often supplemented by other financing sources, which remain available over time. These specifically identified revenues and other financing sources are required by statute to be used for designated activities, benefits or purposes, and must be accounted for separately from the Government’s general revenue. See Note 20—Funds from Dedicated Collections for detailed information.

Intragovernmental interest represents interest earned from the investment of surplus dedicated collections, which finance the deficit spending of all other fund’s non-dedicated operations. These investments are recorded as intragovernmental debt holdings and are included in Note 11—Federal Debt Securities Held by the Public and Accrued Interest, in the table titled Intragovernmental Debt Holdings: Federal Debt Securities Held as Investments by Government Accounts. These interest earnings and the associated investments are eliminated in the consolidation process.

Net Cost of Government Operations

The net cost of Government operations—gross cost (including gains/losses from changes in assumptions) less earned revenue—flows through from the Statements of Net Cost. The net cost associated with funds from dedicated collections activities is separately reported and starting in fiscal year 2015, the intragovernmental net cost associated with funds from dedicated collections was separately reported.

Intragovernmental Transfers

Intragovernmental transfers reflect budgetary and other financing sources for funds from dedicated collections, excluding financing sources related to non-exchange revenues, intragovernmental interest, and miscellaneous revenues. These intragovernmental transfers include appropriations, transfers, and other financing sources. These amounts are labeled as “other changes in fund balance” in Note 20—Funds from Dedicated Collections. Some transfers reflect amounts required by statute to be transferred from the General Fund of the U.S. Government (General Fund) to funds from dedicated collections. For Supplementary Medical Insurance (SMI), transfers from the General Fund financed 76 percent and 78 percent of 2016 program costs to Part B and D, respectively. 

Unmatched Transactions and Balances

Unmatched transactions and balances are adjustments needed to bring the change in net position into balance due primarily to unreconciled intragovernmental differences. See (Note 1.S)—Unmatched Transactions and Balances for detailed information.

The unmatched transactions and balances are included in net operating cost to make the sum of net operating costs and prior period adjustments for the year equal to the change in the net position balance.

Net Operating Cost

The net operating cost equals revenue less net cost of Government operations (that flows from the Statement of Net Cost) adjusted by unmatched transactions and balances see (Note 1.S —Unmatched Transactions and Balances). 

Net Position, Beginning of Period

The net position, beginning of period, reflects the amount reported on the prior year’s balance sheet as of the end of that fiscal year. The net position for funds from dedicated collections is shown separately.

Prior-period adjustments are revisions to the beginning net position presented on the prior year financial statements due to corrections of material errors or certain changes in accounting principles. See Note 1.T—Prior-Period Adjustments for detailed information.

Net Position, End of Period

The net position, end of period, reflects the amount as of the end of the fiscal year. The net position for funds from dedicated collections is separately shown.

United States Government
Statements of Operations and Changes in Net Position
for the Year Ended September 30, 2016
Funds other than those from Dedicated Collections (Combined) Funds from Dedicated Collections
(Note 20)
(Combined)




Eliminations




Consolidated
(In billions of dollars) 2016
Revenue (Note 17):
Individual income tax and tax withholdings 1,525.5 1,077.7 - 2,603.2
Corporation income taxes 294.3 - - 294.3
Excise taxes 42.1 58.3 - 100.4
Unemployment taxes - 46.9 - 46.9
Customs duties 33.3 - - 33.3
Estate and gift taxes 21.0 - - 21.0
Other taxes and receipts 185.1 42.9 - 228.0
Miscellaneous earned revenues 15.3 2.9 - 18.2
Intragovernmental interest - 102.8 (102.8) -
Total Revenue 2,116.6 1,331.5 (102.8) 3,345.3
 
Net Cost of Government Operations:
Net cost 2,798.7 1,605.7 - 4,404.4
Intragovernmental net cost (8.7) 8.7 - -
Intragovernmental interest 102.8 - (102.8) -
Total net cost 2,892.8 1,614.4 (102.8) 4,404.4
Intragovernmental transfers (409.5) 409.5 - -
Unmatched transactions and balances (Note 1.S) 11.7 - - 11.7
Net operating (cost)/revenue (1,174.0) 126.6 - (1,047.4)
Net position, beginning of period (21,491.3) 3,247.7 - (18,243.6)
Prior period adjustments- changes in accounting principles
(Note 1.T)
(1.4) - - (1.4)
Net operating (cost)/revenue (1,174.0) 126.6 - (1,047.4)
Net position, end of period (22,666.7) 3,374.3 - (19,292.4)

The accompanying notes are an integral part of these financial statements.

United States Government
Statements of Operations and Changes in Net Position
for the Year Ended September 30, 2015 (Restated)
Funds other than those from Dedicated Collections (Combined) Funds from Dedicated Collections
(Note 20)
(Combined)




Eliminations




Consolidated
(In billions of dollars) 2015
Revenue (Note 17):
Individual income tax and tax withholdings 1,521.1 1,024.1 - 2,545.2
Corporation income taxes 339.8 - - 339.8
Excise taxes 44.2 57.5 - 101.7
Unemployment taxes - 49.1 - 49.1
Customs duties 33.6 - - 33.6
Estate and gift taxes 19.1 - - 19.1
Other taxes and receipts 165.6 37.3 - 202.9
Miscellaneous earned revenues 38.8 3.8 - 42.6
Intragovernmental interest - 108.4 (108.4) -
Total Revenue 2,162.2 1,280.2 (108.4) 3,334.0
 
Net Cost of Government Operations:
Net cost 2,294.9 1,558.4 - 3,853.3
Intragovernmental net cost (7.2) 7.2 - -
Intragovernmental interest 108.4 - (108.4) -
Total net cost 2,396.1 1,565.6 (108.4) 3,853.3
Intragovernmental transfers (335.2) 335.2 - -
Unmatched transactions and balances (Note 1.S) 5.1 - - 5.1
Net operating (cost)/revenue (564.0) 49.8 - (514.2)
Net position, beginning of period (20,898.3) 3,197.6 - (17,700.7)
Prior period adjustments (Note 1.T, 1.V and 20) (29.0) 0.3 - (28.7)
Net operating (cost)/revenue (564.0) 49.8 - (514.2)
Net position, end of period (21,461.3) 3,247.7 - (18,243.6)

The accompanying notes are an integral part of these financial statements.

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