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<br />-26- <br />NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br /> <br />C. Government-Wide Financial Statement Presentation <br /> <br />The government-wide financial statements (Statement of Net Position and Statement of Activities) <br />display information about the reporting government as a whole. These statements include all of the <br />financial activities of the City. Governmental activities, which are normally supported by taxes and <br />intergovernmental revenues, are reported separately from business -type activities, which significantly <br />rely upon sales, fees, and charges for support. <br /> <br />The Statement of Activities demonstrates the degree to which the direct expenses of a given function or <br />segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a <br />specific function or segment. Program revenues include: 1) charges to customers or applicants who <br />purchase, use, or directly benefit from goods, services, or privileges provided by a given function or <br />segment, 2) operating grants and contributions, and 3) capital grants and contributio ns, including special <br />assessments that are restricted to meeting the operational or capital requirements of a p articular function <br />or segment. Taxes and other internally directed revenues are reported as general revenues. <br /> <br />The government-wide financial statements are reported using the economic resources measurement focus <br />and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when <br />a liability is incurred, regardless of the timing of related cash flows. Property taxes and special <br />assessments are recognized as revenues in the fiscal year for which they are certified for levy. Grants and <br />similar items are recognized when all eligibility requirements imposed by the provider have been met. <br /> <br />As a general rule, the effect of interfund activity has been eliminated from the government-wide financial <br />statements. However, charges between the City’s enterprise funds and other functions are not eliminated, <br />as that would distort the direct costs and program revenues reported in thos e functions. Depreciation <br />expense is included in the direct expenses of each function. Interest on long-term debt is considered an <br />indirect expense and is reported separately on the Statement of Activities. <br /> <br />D. Fund Financial Statement Presentation <br /> <br />Separate fund financial statements are provided for governmental and proprietary funds. Major individual <br />governmental and enterprise funds are reported as separate columns in the fund financial statements. <br />Aggregated information for the remaining nonmajor governmental funds is reported in a single column in <br />the fund financial statements. <br /> <br />Governmental fund financial statements are reported using the current financial resources measurement <br />focus and the modified accrual basis of accounting. Under this basis of accounting transactions are <br />recorded in the following manner: <br /> <br />1. Revenue Recognition – Revenue is recognized when it becomes measurable and available. <br />“Measurable” means the amount of the transaction can be determined and “available” means <br />collectible within the current period or soon enough thereafter to be used to pay liabilities of the <br />current period. For this purpose, the City considers revenues to be available if they are collected <br />within 60 days after year-end. Only the portion of special assessments receivable due within the <br />current fiscal period is considered to be susceptible to accrual as revenue of the current period. <br />Grants and similar items are recognized when all eligibility requirements imposed by the <br />provider have been met. Proceeds of long-term debt and acquisitions under capital leases are <br />reported as other financing sources. <br /> <br />Major revenue that is susceptible to accrual includes property taxes, special assessments, <br />intergovernmental revenue, charges for services, and interest earned on invest ments. Major <br />revenue that is not susceptible to accrual includes licenses and permits, fees, and miscellaneous <br />revenue. Such revenue is recorded only when received because it is not measurable until <br />collected.