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CITY OF GEM LAKE,. MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />bECEMBER 31, 2012 <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />B. Basic Financial Statements (Continued). <br />1. Government -Wide Statements (Continued) <br />In the government -wide statement of net position, both the governmental and <br />business -type activities columns: (a) are presented :on a consolidated basis by <br />column; and (b) are reported on a full accrual, economic resource basis,. which <br />recognizes all long-term assets and receivables as well as long-term debt and <br />obligations. The. City's net position is reported in three parts: (1) net investment in <br />capital assets; (2) restricted net position; and (3.) unrestricted net position. The .City <br />first utilizes restricted resources to finance. qualifying activities. <br />The statement of activities demonstrates the degree to which the direct expenses of <br />each function of the City's governmental. activities :a.nd. different husiness=type activity <br />are offset by program revenues. Direct expenses are those that are clearly <br />identifiable with a specific function or activity. Program revenues include: (1) fees; <br />fines, and charges paid by the recipients of goods, services, ;or privileges provided <br />by a given. function or. activity, and (2) grants and contributions that are restricted to <br />meeting the operational or. capital requirements of a particular function or activity. <br />Revenues that are not classified as program revenues, including all taxes,. are <br />presented as general revenues. <br />2. Fund Financial Statements <br />The fund financial statements provide information about the City's. funds. Separate. <br />statements for each, fund category, governmental and proprietary, are presented. <br />The emphasis' of governmental and proprietary fund financial statements is on major <br />individual governmertal. and enterprise funds, with each displayed as separate <br />columns in the fur 0-:financial statements. All remaining governmental and enterprise <br />funds.are aggregated and reported as nonmajor funds. <br />(16) <br />