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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />The governmment=wide financial statements are reported using the. <br />economic resources irieaaurern6nt:focus <br />and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when <br />a. liability is . incurred, regardless of the .timing of related cash flows. Propertytaxes and special <br />assessments are recognized .as revenues in the fiscal year for which they are certified for levy: Grants and <br />similar items are recognized as revenue when all. eligibility requirements imposed by the provider have <br />been met. <br />As a general rule, the effect of inteirftind activity has boon eliminated from the government -wide financial <br />statements:: However, charges between the.City's enterprise funds and other funciions.are not.eliminated, <br />as. that would distort the, direct costs and program .revenues reported in those functions. Depreciation <br />expense is included..in:the direct expenses.of each function. -Interest on tong -term del t­is considered an. <br />indirect expense and. is reported separately on the.Stateinent.ofActivities. <br />D; Fund Financial Stafeme if-Prei tntation <br />Separate fund.f..nancial statements are.provided. for governmental.and proprietary funds: Major individual <br />governmental and enterprise funds -are reported as separate columns in the fund financial statements. <br />Governmental fund financial statements are reported using the current financial. resources measurement <br />focus and the .modified accrual basis of accounting. Under this basis of accounting, transactions: are <br />recorded in the following tanner: <br />1. Revenue. Recognition —Revenue is recognized when it becomes measurable and available: <br />"Measurable" means the. -amount of the transaction can be determined.and "availabie"-means <br />collectible withift the current period or soon enough thereaAer to be used to pay liabilities ofthe t: <br />current period. For tbis purpose. the City considers revenues to be available if*collected within <br />60 days afier..yearjend.. Only the portion of special :assessments receivable due within the current <br />fiscal period.is.considered. to be susceptible to accrual asrevenue of the current period. Grants <br />and similar items are recognized when: all eligibility requirements imposed by the provider have <br />.been met. Proceeds of long-term -debt and acquisitions under capital leases, when appikabie, are <br />reported as other financing sources. <br />Major revenue that. is: susceptible to accrual includes property. taxes; special assessments, <br />intergovernmental revenue, charges for services, fines and 'forfe Wrds,.facility rentals, and interest <br />;earned on investments. Major revenue that is not susceptible to accrual includes licenses and <br />permits, and miscellaneous revenue. Such revenue is recorded only when received because it is <br />not measurable until collected. <br />2. Recording: of Expenditures — Expenditures are generally. recorded when a liability. is incurred;. <br />except for principal and interest on long-term debt and other long-term obligations., which are <br />.recognized as. -expenditures to the extent they have matured. Capital asset acquisitions are <br />reported astcapital outlay expenditures in the.governmentaI funds. <br />Proprietary. fund financial statements are reported using the economic resources measurement focus and <br />the accrual basis of :accounting, .similar to the government -wide financial statements. Proprietary funds <br />distinguish operating revenues and expenses from nonoperating items. Operating revenues and. expenses <br />.generally result.from providing services and. producing and. delivering goods in connection with a <br />proprietary fund's -principal ongoing operations. The principal operating revenues of the �ity's .enterprise <br />funds are charges to :customers for sales and services. The operating expenses for the enterprise funds <br />include: the cost of sales and services, Administrative expenses, and depreciation -on capital. assets. All <br />revenues and expenses not meeting this definition are reported as nonoperating revenues and. expenses.- <br />=19- <br />