NOTE 4. LIABILITIES

The USPTO records as liabilities all amounts that are likely to be paid as the direct result of events that have already occurred. The USPTO considers liabilities covered by three types of resources, realized budgetary resources, unrealized budgetary resources that become available without further Congressional action, and cash and Fund balance with Treasury. Realized budgetary resources include obligated balances directly funding existing liabilities and unobligated balances as of September 30, 2001. Unrealized budgetary resources represent fee collections in excess of amounts appropriated for current fiscal year spending. When current fiscal year appropriation language makes these unrealized budgetary resources available on October 1 of the following fiscal year without further Congressional action, these resources are used to cover liabilities. In FY 2001 and FY 2000, collections in excess of amounts appropriated for current fiscal year spending were $305,056 thousand and $254,889 thousand, respectively. However, only the FY 2000 excess collections, which became available the following fiscal year, are displayed as covering liabilities as of the Balance Sheet date. In addition, cash and Fund balance with Treasury cover liabilities that will never require the use of a budgetary resource. These liabilities consist of deposit accounts, refunds payable to customers for fee overpayments, undeposited collections and amounts collected by the USPTO on behalf of other organizations.

Due to the funding structure of the USPTO, budgetary resources do not cover a portion of unearned fees. The USPTO’s fees that were withheld and deposited into a restricted special fund receipt account are not considered a resource until appropriated and made available by the issuance of a Treasury warrant, although the USPTO incurred costs to generate these fees. Therefore, budgetary resources from current operations that normally would be used to cover a portion of unearned fees have been used to cover prior year costs associated with restricted fees. In addition, the current patent fee structure sets low initial application fees following later with income from maintenance fees as a supplement to cover the full cost of the patent examination and issuance process. The combination of these funding circumstances requires the USPTO to obtain additional budgetary resources to cover its liability for unearned revenue.

As of September 30, 2001 and 2000, the following liabilities are covered by budgetary resources with the remainder not covered as follows:

Note 4. Liabilities as of September 30, 2001 and 2000

(Dollars in Thousands)			2001	2000
Liabilities Covered by Resources
	Intragovernmental:
		Accounts Payable	$   3,496	$   3,575
		Accrued Payroll and Benefits	5,293	4,654
		Accrued Postemployment Compensation	—	78
		Customer Deposit Accounts	3,504	3,218
	Total Intragovernmental		12,293	11,525
	Accounts Payable		64,177	55,210
	Accrued Payroll and Benefits		38,485	39,018
	Customer Deposit Accounts		53,955	51,929
	Deferred Revenue		10,720	267,301
	Capital Lease Liability		—	2,761
Total Liabilities Covered by Resources			179,630	427,744
Liabilities Not Covered by Resources
	Intragovernmental:
		Accrued Postemployment Compensation	970	880
	Total Intragovernmental		970	880
	Accrued Payroll and Benefits		6,576	—
	Accrued Leave		30,414	25,280
	Deferred Revenue		364,268	71,479
	Actuarial Liability		5,526	4,581
	Capital Lease Liability		3,032	3,032
	Contingent Liabilities		3,590	—
Total Liabilities Not Covered by Resources			414,376	105,252
Total Liabilities			$ 594,006	$ 532,996