USPTO Performance and Accountability Report - U.S. Patent and ...

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FINANCIAL SECTION
United States Patent and Trademark Office
Notes To Financial Statements
As of and for the years ended September 30, 2012 and 2011
NOTE 1. Summary of Significant Accounting Policies
Reporting Entity
The United States Patent and Trademark Office
(USPTO) is an agency of the United States within the
U.S. Department of Commerce. The USPTO administers
the laws relevant to patents and trademarks
and advises the Secretary of Commerce, the
President of the United States, and the Administration
on patent, trademark, and copyright protection, and
trade-related aspects of intellectual property.
These financial statements include the USPTO’s three
core business activities – granting patents, registering
trademarks, and intellectual property policy,
protection, and enforcement – that promote the use
of intellectual property rights as a means of achieving
economic prosperity. These activities give innovators,
businesses, and entrepreneurs the protection
and encouragement they need to turn their creative
ideas into tangible products, and also provide
protection for their inventions and trademarks.
These financial statements report the accounts for
salaries and expenses (13X1006), fee reserve fund
(13X1008), special fund receipts (135127), customer
deposits from the public and other federal agencies
(13X6542), Patent Cooperation Treaty collections
(13X6538), and the Madrid Protocol Collections
(13X6554) that are under the control of the USPTO.
The federal budget classifies the USPTO under the
Other Advancement of Commerce (376) budget
function. The USPTO does not have lending or
borrowing authority. The USPTO does not transact
business among its own operating units, and
therefore, no intra-entity eliminations are necessary.
The USPTO is not subject to federal, state, or local
income taxes. Accordingly, no provision for income
taxes is recorded.
PERFORMANCE AND ACCOUNTABILITY REPORT: FISCAL YEAR 2012
Basis of Presentation
As required by the Chief Financial Officers Act of
1990 and 31 United States Code (U.S.C.) §3515(b),
the accompanying financial statements present the
financial position, net cost of operations, budgetary
resources, and cash flows for the USPTO’s core
business activities. The books and records of the
USPTO serve as the source of this information.
These financial statements were prepared in accordance
with accounting principles generally accepted
in the United States (GAAP) and the form and content
for entity financial statements specified by the Office
of Management and Budget (OMB) in Circular A-136,
Financial Reporting Requirements, as amended, as
well as the accounting policies of the USPTO. Therefore,
they may differ from other financial reports submitted
pursuant to OMB directives for the purpose of monitoring
and controlling the use of the USPTO’s budgetary
resources. The GAAP for federal entities are the
standards prescribed by the Federal Accounting
Standards Advisory Board, which is the official body
for setting the accounting standards of the federal
government.
Throughout these financial statements, assets, liabilities,
revenues, and costs have been classified
according to the type of entity with which the transactions
are associated. Intra-governmental assets
and liabilities are those from or to other federal
entities. Intra-governmental earned revenues are
collections or accruals of revenue from other federal
entities and intra-governmental costs are payments
or accruals to other federal entities.
Allocation transfers are legal delegations by one
department of its authority to obligate budget
authority and outlay funds to another department.
A separate fund account (allocation account) is