Financial Statements of the United States Government for the Fiscal Years Ended September 30, 2017, and 2016

Reconciliations of Net Operating Cost and Budget Deficit

These statements reconcile the results of operations (net operating cost) on the Statements of Operations and Changes in Net Position (SOCNP) to the budget deficit. The premise of the reconciliation is that the accrual and budgetary accounting basis share transaction data.

Receipts and outlays in the budget are measured primarily on a cash basis and differ from the accrual basis of accounting used in the Financial Report. Refer to Note 1B—Basis of Accounting and Revenue Recognition for details. These statements begin with the net results of operations (net operating cost) and report activities where the basis of accounting for the components of net operating cost and the budget deficit differ.

Some presentations of the budget deficit make the distinction between on-budget and off-budget totals. On-budget totals reflect the transactions of all Government entities, except those excluded from the budget by law. Off-budget totals reflect the transactions of Government entities that are excluded from the on-budget totals by law. Under current law, the off-budget totals include the Social Security trust funds and the Postal Service. The budget deficit, as presented in the Financial Report, combines the on-budget and off-budget totals to derive consolidated totals for federal activity.

Components of Net Operating Cost Not Part of the Budget Deficit

This information includes the operating components, such as the changes in benefits payable for veterans, military and civilian employees, environmental and disposal liabilities, and depreciation expense, not included in the budget results.

Components of the Budget Deficit Not Part of Net Operating Cost

This information includes the budget components, such as capitalized fixed assets (that are recorded as outlays in the budget when purchased and reflected in net operating cost through depreciation expense over the useful life of the asset) and increases in other assets that are not included in the operating results.

United States Government
Reconciliations of Net Operating Cost and Budget Deficit
for the Years Ended September 30, 2017, and 2016

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(In billions of dollars)	2017	Restated 2016
Net operating cost	(1,156.7)	(1,051.7)
*Components of net operating cost not part of the budget deficit*
Excess of accrual-basis expenses over budget outlays
*Federal employee and veteran benefits payable
Pension and accrued benefits.	180.5	(106.9)
Veterans compensation and burial benefits.	313.7	477.7
Post-retirement health and accrued benefits	5.3	56.8
Other benefits	(8.8)	9.4
Subtotal - federal employee and veteran benefits payable	490.7	437.0
*Insurance and guarantee program liabilities	15.5	16.7
*Environmental and disposal liabilities	17.9	35.0
*Accounts payable	8.4	(5.9)
*Benefits due and payable	0.6	4.3
*Other liabilities	4.5	13.8
Subtotal - excess of accrual-basis expenses over budget outlays	537.6	500.9
Amortized expenses not included in budget outlays
Property, plant, and equipment depreciation expense	33.6	52.2
Other expenses that are not reported as budget outlays
Property, plant, and equipment disposals and revaluations	(10.0)	(24.9)
Agencies year-end credit reform subsidy re-estimates	28.5	10.4
Excess of accrual-basis revenue over budget receipts
Accounts receivable, net	(7.3)	(7.3)
Taxes receivable, net	(2.8)	(8.1)
Other losses/(gains) and cost/(revenue) that are not budget receipts
*Investments in government-sponsored enterprises	16.0	(2.3)
Deposit fund balances.	11.4	20.3
Subtotal - components of net operating cost not part of budget deficit	607.0	541.2
*Components of the budget deficit that are not part of net operating cost*
Budget receipts not included in net operating cost
Credit reform and other loan activities	(25.8)	9.5
Budget outlays not included in net operating cost
Acquisition of capital assets	(78.6)	(81.5)
*Debt and equity securities	(8.0)	(3.8)
*Inventories and related property	(12.4)	6.3
Effect of prior year agencies credit reform subsidy re-estimates	(10.4)	2.3
*Other assets	(2.2)	20.2
Subtotal - components of the budget deficit that are not part of net operating cost	(137.4)	(47.0)
Other
All other reconciling items	21.4	(29.9)
Budget deficit	(665.7)	(587.4)
*The amounts represent the year over year net change in the Balance Sheet line items.
The accompanying notes are an integral part of these financial statements.

Last modified 02/09/23