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CCP 05-19-2003
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CCP 05-19-2003
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<br />CITY OF ARDEN HILLS, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2002 <br /> <br />Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED <br /> <br />Fixed Assets <br /> <br />Fixed assets used in governmental fund types of the City are recorded in the general fixed assets account group at <br />cost or estimated historical cost if purchased or constructed. Donated fixed assets arc recorded at their estimated <br />fair value at the date of donation. Assets in the general fixed assets account group are not depreciated. Interest <br />incurred during construction is not capitalized on general fixed assets. <br /> <br />Public domain (infrastructure) general fixed assets (e.g., roads, bridges, sidewalks and other assets that are <br />immovable and afvalue only to the City) are not capitalized. <br /> <br />The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' <br />lives are not included in the general fixed assets group or capitalized in the proprietary funds. <br /> <br />Property, plant and equipment in the proprietary funds afthe City are recorded at cost. Property, plant and <br />equipment donated to these proprietary fund type operations are recorded at their estimated fair value at the date <br />of donation. <br /> <br />Major outlays for capital assets and improvements are capitalized in proprietary funds as projects are constructed. <br />Interest incurred during the construction phase of proprietary fund fixed assets is reflected in the capitalized value <br />of the asset constructed, net of interest earned on the invested proceeds over the same period. <br /> <br />Property, plant and equipment are depreciated in the proprietary funds of the City using the straight-line method <br />over the following estimated useful lives: <br /> <br />Assets <br /> <br />Lives <br /> <br />Furniture and equipment <br />Sewer and collection system <br />\Vater distribution system <br /> <br />5 - 10 years <br />40 - 80 years <br />40 - 100 years <br /> <br />Compensated Absences <br /> <br />Employees with at least ten years of service are entitled to receive one-third of their unused sick leave up to a <br />maximum of 800 hours upon tennination in addition to any unused vacation and compensatory time. <br /> <br />The accrual of these benefits is recorded as a liability in the enterprise funds and expensed. The accrual in the <br />enterprise funds was $26,997 at December 31, 2002. The liability for the governmental funds is recorded in the <br />general lang-term debt account group and recorded as an expenditure when paid. The liability in the general <br />long-term account group was $75,724 at December 31, 2002. <br /> <br />Long-term Obligations <br /> <br />The City reports long-term debt of goverlllllental funds at face value in the general lang-term debt account group. <br />Long-term debt and other obligations financed by proprietary funds are reported as liabilities in the appropriate <br />funds. <br /> <br />For governmental fund types, bond premiums and discounts, as well as issuance costs are reeogruzed during the <br />current period. Bond proceeds are reported as another financing source net of the applicable premium or <br />discount. Issuance costs, other than those withheld from the actual net proceeds received, are reported as debt <br />service expenditures. For proprietary fund types, bond discounts are deferred and amortized over tbe life of the <br />bonds using the straight-line method. <br /> <br />-15- <br /> <br />I <br /> <br />.- <br />I <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />e. <br /> <br />I <br /> <br />- <br /> <br />- <br /> <br />. <br /> <br />- <br /> <br />I <br /> <br />.- <br />- <br /> <br />I <br />
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