CCP 05-22-2006 - Laserfiche WebLink

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CITY OF ARDEN HILLS, MINNESOTA NOTES TO HlE FINANCIAL STATEMENTS DECEMBER 31,2005 Note 1: '"::~":~::"^"TAccmm'mGMKrnR A. E' I. Accounts receivable include amounts billed for services PlOVJdOO'15efOT.".:y~mn . 4ltility . rprise fund receivables are also included for services provided in 201" The City ann. ually certifies delinquent water aJi sewer accounts to the County for collection in the following ye _Ther",fM~<>L~becncnQ,allol'L""ce.,[or".d"u~tful accounts established, . Special Assessments Special assessments represent the financing for public improvements paid for by benefiting property owners, These assessments are recorded as receivables upon certification to the County. Special assessments are recognized as revenue when they are annually certified to the County or received in cash OT within 60 days after year end. All governmental special assessments receivable are offset by a deferred revenue liability in the fund fmancial statements. Interfund Receivables and Payablcs Activity between funds that arc representative oflendinglborrov.r:ing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other fimds" (i.e., the CWTent portion of inter fund loans) or "advances to/from other funds" (i.e_, the non-current portion of inter fund loans), All other out$tanding balances between funds are reported as "due to/from other funds." A.ny residual balances outstanding benveen tbe governmental activities and business-type activities are reported in the government-wide fmancial statements as "internal balances." Advances between fimds) as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable . available financial resources. Inventories and Prepaid Items All inventories are stated at the lower of cost or market on the fust-in, first-out (FrFO) method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund fInancial statements. Capital Assets Capital assets, which include property, plant, equipment and iufrastmcture assets (e,g" roads, bridges, sidewalks, and similar items) are, reported in the applicable governmental or business-type activities columns in tbe governrnent- wide financial statements. Capital assets are defmed by the City as assets \vith an initial: individual cost of more than $5,000 (amonnt not rounded) and an estimated usefilllife in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. In the case of initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the City chose to include items dating back to June 30, 1980, The City was able to estimate the historical cost for the initial reporting of these assets through backtracking (i_e" estimating the current replacement cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition year or estimated acquisition year). As the City constmcts or acquires capital assets each period, including infrastructure assets. they are capitalized and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially amOlmts spent in relation to capital assets tbat do nor increase the capacity or efficiency of rhe item or extend its useful life beyond the original estimate. In the case of donations the City values these . capital assets at the estimated fair value of the item at the date of its donation. -27-