2002-05-22 WS Packet - Laserfiche WebLink

Home Browse Search

City of Centerville March 29, 2002 Page Twelve Government-wide Financial Statements The government-wide financial statements are (1) a statement of net assets and (2) a statement of activities. The statement of net assets presents the government's financial position at a point in time (like a balance sheet does); the statement of activities presents its activities during a period (like an operating statement does). These statements present bighly aggregated information for the overall government; they do not display individual funds or fund types. They also present financial information in separate rows and columns for the (1) primary government's aggregate governmental activities, (2) primary government's aggregate business-type activities, (3) total primary government, and (4) discretely presented component units. Capital Assets Capital assets are tangible and intangible asset, that are used in operations that have initial useful lives longer than one year. They include land and improvements, easements, buildings and improvements, equipment, and works of art and historical treasures. Capital assets also include infrastructure assets - normally stationary capital assets that can be preserved for significantly greater number of years than most capital assets. Infrastructure assets include roads, bridges and tunnels; water, sewer and drainage systems; dams; lighting systems; and buildings that are an ancillary part of a network of infrastructure assets. Capital assets are reported in the statement of net assets at historical cost (or estimated fair value, if donated) and net of accumulated depreciation. They are depreciated in the statement of activities over their estimated useful lives. Infrastructure Assets GASB Statement No. 34 applies prospectively to all general infrastructure assets beginning at the effective dates of the Statement (or earlier, if the statement is implemented earlier). Governments are also encouraged to apply the Statement retroactively to all existing major general infrastructure assets at that time. However, phase 1,2 governments need not retroactively report those assets until calendar year 2006, 2007 - four years after their required implementation of Statement No. 34. Phase 3 govermnents are encouraged but not required to report major general infrastructure assets retroactively. If there are inadequate records of the actual historical cost of existing general infrastructure assets, govermnents can estimate historical cost They also may limit retroactive application to only those major general infrastructure assets that were acquired or significantly reconstructed, or that received significant improvements, in fiscal years ending after June 30, 1980. The above gives you some general information on GASB Statement No. 34 implementation. We intend to educate and work with all of our clients in developing a plan to implement this new statement As a result of implementing this statement, there will no doubt be additional fees for our services. These expected increases will most likely result from additional time spent in the areas of (1) training, (2) account structure modifications to provide information necessary to prepare financial statements, (3) accounting for fixed assets, infrastructure assets and related depreciation, and (4) financial statement preparation. The more that the City staff can do in the areas of fixed asset accounting and proper account structure will help in reducing these costs. We will help you as much as possible to accomplish this. III * * * This report is intended solely for the information and use of management and CounciL Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting records and related data. The comments and recommendations in the report are purely constructive in nature, and should be read in this context. If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your convenience. We wish to thank you for the continued opportunity to be of service and for the courtesy and cooperation extended to us by your staff March 29, 2002 Minneapolis, Minnesota ~/U<:/'7Ii~/LLf' ABDO, EICK & MEYERS, LLP Certified Public Accountants