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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, 2012 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL.FLINDS $ 53,265 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 andreported as depreciation expense. Depreciation. Expense. $ (62,440) (625440). 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 deferred in the governmental funds. Deferred Revenue - December 31, 2011 355;048 Deferred. Revenue - December 31, 2012 229,043 . (126,005) The governmental funds report:.bond proceeds as financing sources, while repayment of. bond principal. is reported as an expenditure! In the statement of net assets, 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 of issuance costs, 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. lathe statement: of activities,.. however; interest expense is recognized as it accrues, regardless of when it is. due. The net effect of these differences in thetreatment of general obligation bonds and related items is :as follows: Repaymentof Bond Principal 100,452 Change in Accrued Interest Payable 1,630 Amortization of Bond Issue Costs (;827) Amortization of Bond ❑iscount. (1,774) 97,481 CHANGE IN NET ASSETS OF GOVERNMENTAL. ACTIVITIES $. (37,699} See accompanying. Notes to Basic Financial. Statements. 01)