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CITY OF GEM LAKE, MINNESOTA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL ACTIVITIES YEAR ENDED DECEMBER 31, 2016 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS .$ (1,003,844) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as. expenditures. However, in the statement of activities, assets are capitalized and the cost is allocated over their estimated useful lives and reported as depreciation expense. Capital outlays $ .323,989 Depreciation Expense. (65,959) 258,030 Delinquent and deferred property taxes and special assessments receivable will be collected. subsequent to year-end, but are not available soon enough to pay for the current period's expenditures and, therefore., are unavailable resources in the governmental funds. Unavailable Resources - December.3:1, 2015 650,862, Unavailable Resources - December 31., 201.6. 49.7,799 (53;063) The governmental funds report: bond proceeds as financing sources, while repayment of bond principal is reported as an expenditure. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities and repayment of principal reduces the liability. Also., governmental funds report the effect premiums and discounts when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Interest is recognized as an expenditure in the governmental funds when it is due. In the: statement of activities, however,. interest expense is recognized as it accrues, regardless of when it is due. The net effect of these differences in the treatment of general obligation bonds and related items is as follows: Repayment of Bond Principal 745,000 Change in Accrued Interest Payable 6,323 Amortization of Bond Discount (5,744) 745,579 CHANGE. IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ (53,298) See accompanying Notes to Basic Financial Statements. (9)