2003-03-26 CC Packet - Laserfiche WebLink

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CITY OF CENTERVILLE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The City has the following fund types and account groups: Governmental funds are used to account for the City's general government activities. Governmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptJ.'ble 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 liabilities 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 susceptJ.'ble 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 generally accepted accounting principles in the United States of America requires management to make estimates and assumptions 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 susceptJ.'ble 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 I I Governmental funds include the following fund types: The generalfund 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 fimds account for revenue sources that are legally restricted to expenditures for specified purposes (not including major capital projec!B). The debt service fimds account for the servicing of general long-term debt not being financed by proprietary funds. The capital projects fimds account for the acquisition of fixed assets or construction of major capital projects not being financed by proprietary funds. Propriettzry funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. In accordance with the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 20, Accounting and FmaTlcial Rej)orting for Pro,prietary Ftmil!\l and other Governmental Entities that use Pro,prietary Fund Accounting. the City applies all applicable GASB pronouncements plus all Financial Accounting Standards Board (F ASB) Statements and Interpretations, Accounting Principles Board opinions, and Accounting Research Bulletins issued on or before November 30, 1989, except for those that conflict with or contradict GASB pronouncements. The City has elected not to apply FASB Statements and Interpretations issued after November 30, 1989. Proprietary funds include the following fund type: -11-