Notes to the Financial Statements

Note 21. Prior Period Adjustments

During fiscal year 2010, VA adopted SFFAS 33, Pensions, Other Retirement Benefits, and Other Postemployment Benefits: Reporting Gains and Losses from Changes in Assumptions, and Selecting Discount Rates and Valuation Dates. This resulted in a $66.5 billion reduction in the Veterans Compensation and Burial Actuarial Liabilities and an increase to VA’s net position by $66.5 billion. Additionally, NASA reviewed the consumption method in relation to its business processes and operations and determined that it did not reflect NASA’s business processes and operations and that the purchase method explained in SFFAS No. 3, Accounting for Inventory and Related Property, is the preferred method. Accordingly, NASA reduced its assets and net position by $3.0 billion.

During fiscal year 2009, a DOD component implemented an Enterprise Resource Planning system that provided a means to revalue inventory from LAC to moving average cost, which is the Department’s current policy for reporting inventory. The result was a prior period adjustment due to a change in accounting principle that increased the 2009 beginning net position by $1.6 billion. Additionally, DOI adopted SFFAS 31, Accounting for Fiduciary Activities, which resulted in the removal of net fiduciary assets and liabilities of $(0.3) billion from its net position.