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Centerville 2010 Financial Report
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Centerville 2010 Financial Report
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CITY OF CENTERVILLE, MINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />FOR THE YEAR ENDEDDECEMBER 31, 2010 <br /> <br />Note1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED <br /> <br />Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be <br />susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of <br />special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as <br />revenue of the current period. All other revenue items are considered to be measurable and available only when cash <br />is received by the City. <br /> <br />Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is <br />recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the <br />year in which the resources are measurable and become available. <br /> <br />Non-exchange transactions, in which the City receives value without directly giving equal value in return, include <br />property taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in <br />the year for which the tax is levied. Revenue from grants, entitlements and donations is recognized in the year in <br />which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which <br />specify the year when the resources are required to be used or the year when use is first permitted, matching <br />requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure <br />requirements, in which the resources are provided to the City on a reimbursement basis. On a modified accrual basis, <br />revenue from non-exchange transactions must also be available before it can be recognized. <br /> <br />Deferred revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants <br />and entitlements received before eligibility requirements are met are also recorded as deferred revenue. On the <br />modified accrual basis, receivables that will not be collected within the available period have also been reported as <br />deferred revenue in the fund financial statements. <br /> <br /> The preparation of financial statements in conformity with accounting principles generally accepted in the United <br />States of America requires management to make estimates and assumptions that affect certain reported amounts and <br />disclosures. Accordingly, actual results could differ from those estimates. <br /> <br />The City reports the following major governmental funds: <br /> <br />General fund <br />The is the City’s primary operating fund. It accounts for all financial resources of the City, except <br />those required to be accounted for in another fund. <br /> <br />Debt Service fund <br />The accounts for the resources accumulated and payments made for principal and interest on <br />long-term general obligation debt of governmental funds. <br /> <br />Park fund <br />The captures all park capital items and receives all the City’s park dedication fees. <br /> <br />2009 Street and Utility Improvementsfund <br />The accounts for the resources accumulated and payments made for <br />the street and utility improvements started in 2009. <br /> <br />The City reports the following major proprietary funds: <br /> <br />Water fund <br />The accounts for the activities of the water distribution system the City maintains. <br /> <br />Sewer fund <br />The accounts for the activities of the City’s sewage collection operations. <br /> <br />Storm Water fund <br />The accounts for the activities of the City’s storm water collection operations. <br />-50- <br /> <br />
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