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2013 Report on Form 10-K United States Postal Service 101
Postal Service has not recognized gains as a result of these valuation measurements. All recognized losses
have been incorporated into our financial statements, and the unrecognized gains and losses are not
considered to have a significant impact upon our operations.
Carrying
Amount Fair
Value
Carrying
Amount Fair
Value
Revenue Forgone $ 385 $ 461 $ 385 $ 533
Total Long-Term Financial Assets 385 461 385 533
5,200 5,517 5,500 6,290
Total Long-Term Financial Liabilities $ 5,200 $ 5,517 $ 5,500 $ 6,290
Fair Value of Long-Term Financial Assets
(Dollars in millions)
2013 2012
Debt
and Liabilities
For The Years Ended September 30,
For the year ended September 30, 2013, there were no significant transfers between Level 1 and Level 2
assets or liabilities.
Non-financial assets, such as property and equipment, are measured at fair value when there is an indicator
of impairment or when a decision is made to dispose of an asset, and recorded at fair value only when
impairment is recognized. Impairment analyses of property and equipment were performed in each quarter
of 2013, 2012, and 2011, and based on those analyses, impairment charges of $26 million, $80 million, and
$21 million were recorded in 2013, 2012, and 2011, respectively. Independent appraisals, adjusted for
estimated selling costs, are used to determine the fair value of non-financial assets deemed impaired or
being held for sale. Independent third party appraisals are deemed level 2 inputs as defined above. See
section on impaired assets in Note 3, Summary of Significant Accounting Policies, and Note 5, Property and
Equipment.
NOTE 12 — REVENUE FORGONE
Revenue forgone is an appropriation that compensates the Postal Service for the cost of services that it is
required to perform at no cost or reduced cost to certain groups. Congress appropriates funds to reimburse
the Postal Service for the revenue that has been forgone in providing these services.
The lost revenue associated with the services that will be provided during a given year is estimated and
forwarded to Congress with a funding request. At the end of the year, the actual value of services provided
is reconciled with this funding request. If the actual services provided differs from that underlying the initial
funding request, the Postal Service will request additional funding or return any excess funding through a
reduction to the next revenue forgone funding request.
The Revenue Forgone Reform Act of 1993 authorized Congress to make 42 annual payments of $29 million
each, beginning in 1994 and continuing through 2035, to reimburse the Postal Service for certain services
performed or revenue forgone from 1991 through 1998. The payments authorized by the Revenue Forgone
Reform Act of 1993 totaled $1,218 million, which had a present value calculated at a 7% discount rate of
approximately $390 million. The $390 million was recognized as revenue during fiscal years 1991 through
1998. The discounted present value of the remaining future payment for the years ended September 30,
was $397 million in 2013, and $374 million in 2012.