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CITY OF GEM LAKE, MINNESOTA NOTES TO BASIC FINANCIAL. STATEMENTS DECEMBER 31., 2011 NOTE 1 SUMMARY OF SIGNIFICANT. ACCOUNTING POLICIES (CONTINUED) Special Assessment. Revenue Recognition (Continued) Within the fund financial statements, the revenue from special assessments is recognized. by the City when it becomes measurable and available to finance expenditures. of the current. fiscal period. In practice, current and. delinquent special assessments received by the City are recognized as revenue. for :the current year. Special assessments are 'collected by the County and remitted by December 31 (remitted to the City, the following January) and are also recognized: as revenue for the current year; All remaining delinquent, deferred and special deferred assessments receivable in governmental funding are completely offset by deferred revenues. Deferred revenue in. governmental. activities is susceptible to full accrual on the government -wide statements. Once a special assessment roll is adopted, the amount. attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City's City Council or court. action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale and the first proceeds of that sale (after costs,. penalties and expenses of sale) are remitted to the. City in payment of delinquent special. assessments. Generally, the City will collect the full amount of its special assessments riot adjusted. by:the City's City Council or court action. Pursuant to State Statutes, a property shall be subject to a tax forfeit sale after three years.unless it is.homesteaded, agricultural or seasonal recreational land in which event the property is subject. to such sale. after five years. J. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, sidewalks, street lights, and similar items) are reported. in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are recorded at historical cost or estimated historical cost if purchased or constructed. The cost of normal maintenance and repairs that do not add to. the value of the asset or materially extend asset lives are not capitalized. Major outlays: for capital assets and improvements are capitalized as.projects are constructed. The government reports infrastructure assets.on a network and subsystem basis... In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the City chose to include all such items regardless of their acquisition date or amount. 00