CCP 05-19-2003 - Laserfiche WebLink

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I I. Note 1: I I I I I I I .e I I I I I I I. I I CITY OF ARDEN HILLS, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The City has the following fund types and account groups: Governmentalfunds are used to account for the City's general government activities. Governmental fund types use the flow of current [mancial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues arc recognized when susceptible to accrual (i.e., when they are "measurable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay Iiahilities of the current period. The City considers all revenues available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes, franchise taxes, licenses, interest and special assessments are susceptible to accrual. Other receipts and taxes become measurable and available when cash is received by the government and are recognized as revenue at that time. The preparation of general purpose financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and asswnptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Governmental funds include the following fund types: The general fund is the City's primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund. The special revenue funds account for revenue sources that are legally restricted to expenditures for specified pmposes (not including major capital projects). The debt service funds account for the servicing of general long-term debt not being financed hy proprietary funds. The capital projects funds account for the acquisition of fixed assets or construction of major capital projects not heing financed by proprietary funds. -12-