2012 06-19 CCP - Laserfiche WebLink

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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, 2011 2011 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ 43,114 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 $ 3,524 Depreciation Expense (62,439) (58,915) 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, 2010 410,283 Deferred Revenue - December 31, 2011 355,048 (55,235) 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. 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 98,276 Change in Accrued Interest Payable 1,596 Amortization of Bond Issue Costs (2,827) Amortization of Bond Discount (1.774) 95,271 CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 24,235 See accompanying Notes to Basic Financial Statements. (10)