Laserfiche WebLink
CITY OF CENTERVILLE, MINNESOTA <br /> NOTES TO FINANCIAL STATEMENTS <br /> DECEMBER 31, 1999 <br /> Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED <br /> Receivables and Payables <br /> Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of <br /> the fiscal year are referred to as either "interfund receivables/payables" (i.e., the current portion of interfund <br /> loans) or "advances to /from other funds" (i.e., the non - current portion of interfund loans). All other outstanding <br /> balances between funds are reported as "due to/from other funds." <br /> Advances between funds are offset by a fund balance reserve account in applicable governmental funds to <br /> indicate they are not available for appropriation and are not expendable available financial resources. <br /> Inventories <br /> The inventories are stated at the lower of cost or market on the fast -in, first-out (FIFO) method. <br /> Prepaid Items <br /> Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid <br /> items. <br /> Fixed Assets <br /> Fixed assets used in governmental fund types of the City are recorded in the general fixed assets account group <br /> (unaudited) at cost or estimated historical cost if purchased or constructed. Donated fixed assets are recorded at <br /> their estimated fair value at the date of donation. Assets in the general fixed assets account group are not <br /> depreciated. Interest incurred during construction is not capitalized on general fixed assets. <br /> Public domain (infrastructure) general fixed assets (e.g., roads, bridges, sidewalks and other assets that are <br /> immovable and of value only to the City) are not capitalized. <br /> The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' <br /> lives are not included in the general fixed assets group or capitalized in the proprietary funds. <br /> Property, plant and equipment in the proprietary funds of the City are recorded at cost. Property, plant and <br /> equipment donated to these proprietary fund type operations are recorded at their estimated fair value at the date <br /> of donation. <br /> Major outlays for capital assets and improvements are capitalized in proprietary funds as projects are <br /> constructed. Interest incurred during the construction phase of proprietary fund fixed assets is reflected in the <br /> capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. <br /> Property, plant and equipment are depreciated in the proprietary funds of the City using the straight line method <br /> over the following estimated useful lives: <br /> Assets Years <br /> Collection system 60 <br /> Water distribution system 40 <br /> Equipment 5 -10 <br /> Compensated Absences <br /> Unused vacation is allowed to be carried over at year end. At year end, $16,169 is recorded in the General <br /> Long -term Debt Account Group for unused vacation. <br /> -12- <br />