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CITY OF CENTERVILLE, MINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />DECEMBER 31, 2013 <br />Note 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED <br />Accounts receivable <br />Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise fund <br />receivables are also included for services provided in 2013. The City annually certifies delinquent water and sewer <br />accounts to the County for collection in the following year. Therefore, there has been no allowance for doubtful accounts <br />established. <br />Interfund receivables and payables <br />Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal <br />year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from <br />other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported <br />as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type <br />activities are reported in the government-wide financial statements as “internal balances.” <br />Property taxes <br />TheCityCouncil annually adopts a tax levy in December and certifies it to the County for collection in the following <br />year.The County is responsible for collecting all property taxes for the City.These taxes attach an enforceable lien on <br />taxable property within the City on January 1 and are payable by the property owners in two installments.The taxes are <br />collected by the County Auditor and tax settlements are made to the City during January, July and December each year. <br />Delinquent taxes receivable include the past six years’ uncollected taxes.Delinquent taxes have been offset by a deferred <br />inflow of resources liability fordelinquent taxes not received within 60 days after year end in the fund financial <br />statements. <br />Special assessments <br />Special assessments represent the financing for public improvements paid for by benefiting property owners.These <br />assessments are recorded as receivables upon certification to the County.Special assessments are recognized as revenue <br />when they are received in cash or within 60 days after year end.All governmentalfund specialassessments receivable <br />are offset by a deferred inflow of resourcesliability in the fund financial statements. <br />Inventories and prepaid items <br />All inventories are valued at cost using the first-in/first-out (FIFO) method.Inventories of governmental funds are <br />recorded as expenditures when consumed rather than when purchased. <br />Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in <br />both government-wide and fund financial statements. <br /> <br />